ABN AMRO Mutual Fund - Kotak Mahindra · PDF fileSecurities and Exchange Board of India...

www.assetmanagement.abnamro.co.in

Sponsor Trustee Asset Management Company

ABN AMRO Asset Management ABN AMRO Trustee (India) ABN AMRO Asset Management

(Asia) Limited Private Limited (India) Limited

Registered Office: Registered Office: Registered Office:43/F, Cheung Kong Centre, 101,10th Floor, Sakhar Bhavan, 101,10th Floor, Sakhar Bhavan,2 Queen's Road Central, Hong Kong Nariman Point, Mumbai 400 021 Nariman Point, Mumbai 400 021

This Offer Document sets forth concisely the information about the Scheme that a prospective investor ought to know before investing.

This Offer Document should be retained for future reference. The particulars of the Scheme has been prepared in accordance with the

Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, as amended till date, and filed with the Securities and

Exchange Board of India, and the Units being offered for the public subscription have not been approved or disapproved by the Securities

and Exchange Board of India nor has the Securities and Exchange Board of India certified the accuracy or adequacy of this Offer

Document.

This Offer Document will remain effective till a ‘material change’ (other than a change in Fundamental Attributes and within the purview

of this Offer Document) occurs and thereafter the changes shall be filed with Securities and Exchange Board of India and circulated to

the Unitholders or as may be publicly notified by advertisements in the newspapers subject to applicable regulations. In accordance

with Securities and Exchange Board of India directives, this Offer Document will be fully revised and updated at least once in two years

from the date of this Offer Document. Till the time this Offer Document is reprinted, an addendum giving details of each of the changes

will be attached to the Offer Document. The yearly-condensed financial information of the Scheme will also be included in the form of

addendum to this Offer Document till the time the revised Offer Document is printed. Investors may also like to ascertain about any

further changes after the date of this Offer Document from the Mutual Fund / its Investor Service Centres / distributors.

This Offer Document is dated March 3, 2006

Offer of Units at Rs. 10 each during the

New Fund Offer Period, and at NAV based prices thereafter

New Fund Offer Closes : April 7, 2006New Fund Offer Opens : March 13, 2006

ABN AMRO Future Leaders Fund

An Open-Ended Equity Scheme with no assured returns

OFFER DOCUMENT

OFFER OF UNITS OF:

ABN AMRO Mutual Fund

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ABN AMRO Future Leaders Fund - OD

SPONSOR

ABN AMRO ASSET MANAGEMENT (ASIA) LIMITED

Registered Office :

43/F, Cheung Kong Centre,

2 Queen’s Road Central, Hong Kong.

TRUSTEE

ABN AMRO TRUSTEE (INDIA) PRIVATE LIMITED

Registered Office :

101, 10th Floor, Sakhar Bhavan,

Nariman Point, Mumbai 400 021.

ASSET MANAGEMENT COMPANY

ABN AMRO ASSET MANAGEMENT (INDIA) LIMITED

Registered Office :



REGISTRAR AND TRANSFER AGENT

COMPUTER AGE MANAGEMENT SERVICES (P) LIMITED

A & B, Lakshmi Bhawan,

609, Anna Salai, Chennai 600 006.

CUSTODIAN

DEUTSCHE BANK A G

Kodak House,

22, D. N. Road,

Fort, Mumbai 400 001.

STATUTORY AUDITORS TO THE MUTUAL FUND

S. R. BATLIBOI & CO.

6th Floor, Express Tower,


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ABN AMROFuture Leaders Fund


Section Particulars Page No.

Standard Risk Factors ..................................................... 3

Scheme Specific Risk Factors andSpecial Considerations .................................................... 3

Definitions ........................................................................ 6

Due Diligence By The Asset Management Company ... 7

I. Summary of the Scheme ................................................ 8

Constitution of the Mutual Fund ....................................... 9

The Mutual Fund ................................................................ 9

The Sponsor ....................................................................... 9

The Trustee ........................................................................ 9

Trustee - Fees and Expenses ............................................. 9

Summary of the substantive provisions ofthe Trust Deed ................................................................... 9

Rights, Duties and Responsibilities of theTrustee under the Regulations ........................................... 10

Directors of the Trustee ..................................................... 11

The Asset Management Company .................................... 11

Asset Management Fees .................................................. 11

Duties and Responsibilities of theAsset Management Company ........................................... 11

Directors of the AMC......................................................... 12

Key Personnel of the AMC and Relevant Experience ........ 13

Fund Manager .................................................................... 14

Investor Relations Officer .................................................. 14

Statutory Auditors for the Mutual Fund ............................. 14

Custodian ........................................................................... 14

Registrar and Transfer Agent ............................................. 14

Fund Accountant ................................................................ 14

Collecting Bankers ............................................................. 14

II. Investment Objective & Policy ....................................... 15

Investment Pattern ............................................................ 15

Investment Strategy .......................................................... 15

Change in Investment Pattern ........................................... 15

Terms of the Plan under the Scheme ................................ 15

Changes in Fundamental Attributes .................................. 16

Benchmark Index ............................................................... 16

Investment Approach and Risk Control ............................. 16

Trading in Derivatives ......................................................... 17

Policy on Offshore Investments by the Scheme ............... 18

Investment Decisions ........................................................ 19

Portfolio Turnover .............................................................. 19

Investment Restrictions ..................................................... 19

Computation of Net Asset Value ....................................... 20

Valuation of the Scheme's Assets and determinationof the Net Asset Value ....................................................... 21

Accounting Policies and Standards .................................... 23

Unclaimed Redemption / Dividend Amount ...................... 23

Investment by the AMC in the Scheme ............................ 23

III. Units & the New Fund Offer .......................................... 24

Units on Offer - General Information ................................. 24

New Fund Offer ................................................................. 24

New Fund Offer Period ...................................................... 24

New Fund Offer Price ........................................................ 24

Extension / Termination of the New Fund Offer Period ..... 24

Minimum Subscription Amount ......................................... 24

Allotment and Refund ........................................................ 24

Minimum Amount and AdditionalAmount for Application ...................................................... 24

Investment Plan Offered Under the Scheme .................... 24

Dividend & Distributions .................................................... 24

Effect of Dividends ............................................................ 24

Dividend Re-investment Facility ........................................ 24

Facilities ............................................................................. 24

Who can Invest ? ............................................................... 26

Who cannot Invest ? .......................................................... 26

How to Apply ? .................................................................. 26

TABLE OF CONTENTS

Section Particulars Page No.

Mode of Payment .............................................................. 27

Master Account / Folio ....................................................... 27

Account Statement ............................................................ 27

Unit Certificates ................................................................. 27

Householdings ................................................................... 27

Mode of Holding ................................................................ 27

Nomination Facility ............................................................ 28

Transfer and Transmission Facility ..................................... 28

Lien on Units ...................................................................... 28

Pledge of Units .................................................................. 28

Sale of Units ...................................................................... 28

Redemption of Units .......................................................... 29

Minimum Amount / Units for Redemption ........................ 29

Redemption Price .............................................................. 29

Applicable NAV for Redemption of Units ........................... 29

Payment of Redemption Proceeds .................................... 29

Bank Details ....................................................................... 29

Redemptions by NRIs / FIIs ............................................... 29

Effect of Redemptions ....................................................... 30

Right to Limit / Withhold Redemption ............................... 30

Freezing / Seizure of Accounts .......................................... 30

Closure of Unitholders' Account / MandatoryRedemption of Units .......................................................... 30

Suspension of Sale / Redemption / SwitchingOptions of the Units .......................................................... 30

IV. Load Structure & Recurring Expenses ........................... 31

Expenses of the Scheme ................................................... 31

Fees and Expenses of the Past Schemes andCondensed Financial Information ...................................... 32

V. Unit Holders' Rights & Services ..................................... 36

Investor Services ............................................................... 36

Convenience in Transactions ............................................. 36

Receiving Account Statement /Correspondence by e-mail ................................................. 36

Fax Submission .................................................................. 36

Information Dissemination ................................................. 36

Personal Identification Number (PIN) ................................. 37

Rights of Unit Holders ....................................................... 37

Duration of the Scheme / Winding Up ............................... 37

Effect of Winding Up ......................................................... 37

Procedure and Manner of Winding Up .............................. 37

Minimum Number of Investors and MaximumHolding by a Single Investor .............................................. 37

Tax Benefits of Investing in the Mutual Fund .................... 37

VI. Other Matters .................................................................. 41

Unit Holder Grievances Redressal Mechanism ................. 41

Investor Complaints ........................................................... 41

Associate Transactions ...................................................... 41

Dealing with Associate Companies ................................... 41

Borrowing by the Mutual Fund .......................................... 42

Underwriting by the Mutual Fund ...................................... 42

Inter-Scheme Transfers ...................................................... 42

Disclosure under SEBI Regulation 25(11) .......................... 42

Electronic Clearing Service (ECS) ...................................... 44

Powers to Remove Difficulties .......................................... 44

Powers to Make Rules ...................................................... 44

Penalties, Pending Litigation or Proceedings,Findings of Inspections or Investigation for which actionmay have been taken or is in the process of being takenby any Regulatory Authority ............................................... 44

Omnibus Clause ................................................................ 44

Documents available for Inspection ................................... 44

List of Collection Centres (During New Fund OfferPeriod) and List of Official Points of Acceptance ofTransaction (post new fund offer period) ........................... inside

back cover

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STANDARD RISK FACTORS

u Mutual Funds and securities investments are subject to market risksand there can be no assurance or guarantee that the Scheme objectiveswill be achieved.

u As with any investment in securities, the NAV of Units issued underthe Scheme may go up or down depending on the various factors andforces affecting the capital markets. The various factors which impactthe value of the Scheme’s investments include, but are not limited to,fluctuations in the equity and bond markets, fluctuations in interestrates, prevailing political and economic environment, changes ingovernment policy, factors specific to the issuer of the securities, taxlaws, liquidity of the underlying instruments, settlement periods, tradingvolumes etc.

u Past performance of the Sponsors and its affiliates / Mutual Fund /AMC does not indicate the future performance of the Scheme of theMutual Fund.

u ABN AMRO Future Leaders Fund is the name of the Scheme anddoes not in any manner indicate either the quality of the Scheme or itsfuture prospects and returns.

u The Sponsor is not liable or responsible for any loss or shortfall resultingfrom the operations of the Scheme.

u Investors should study this Offer Document carefully in its entiretybefore investing and retain the Offer Document for future references.

u Unitholders in the Scheme are not being offered any guaranteed /assured returns.

SCHEME SPECIFIC RISK FACTORS AND SPECIAL

CONSIDERATIONS

u It is important to note that mid/small cap stocks can be riskier andmore volatile on a relative basis; although middle and smallercapitalization stocks provide one an opportunity to go beyond the usuallarge bluechip stocks and present possible higher capital appreciation.Therefore, the risk levels of investing in small cap and mid cap stocksis more than investing in stocks of large well-established companies.Please note that over a time these two categories have demonstrateddifferent levels of volatility and investment returns. And it is importantto note that generally, no one class consistently outperforms the others.While smaller and medium size companies may offer substantialopportunities for capital appreciation, they also involve substantial risks.Historically, these companies have been more volatile in price thanlarger company securities, especially over the short term. Smallercompanies are subject to lesser growth prospects, lower degree ofliquidity Among the reasons for the greater price volatility are the lesscertain of, the in the markets for such securities, and the greatersensitivity of smaller companies to changing economic conditions.Smaller Companies carries large amount of liquidity risk compared tothe Large Cap companies, as the ability to sell is limited by overalltrading volume in the securities, which it invests. In addition, smallercompanies may lack depth of management, be unable to generatefunds necessary for growth or development, or be developing ormarketing new products or for services for which markets are not yetestablished and may never become established. They could also sufferfrom disadvantages such as - outdated technologies, lack of bargainingpower with suppliers, low entry barriers and inadequate managementdepth. Overall, the risks of investing in medium / small companies are(a) transparency/liquidity levels may not be on par with established,large companies; (b) corporate governance may be an issue with somecompanies; and (c) they may not be resilient enough to withstandshocks of business/economic cycles.

u The scheme proposes to invest in equity and equity-related securities.Trading volumes, settlement periods and transfer procedures mayrestrict liquidity of investments in equity and equity-related securities.Different segments of the Indian financial markets have differentsettlement periods, and such period may be extended significantly byunforeseen circumstances. The length of the settlements may affectthe schemes in the event the schemes have to meet an inordinatelylarge number of redemption. In view of the above, the Trustee at itssole discretion reserves the right to withdraw sale and/or repurchase/redemption or switching of the units in a scheme (including any one ofthe Plans of the scheme) temporarily or indefinitely. The scheme willretain certain investments in cash or cash equivalent for the day to dayliquidity requirements.

u· The performance of the scheme may be affected by changes inGovernment policies, general levels of interest rates and risk associatedwith trading volumes, liquidity and settlement systems in equity anddebt markets.

u· The Scheme, which is being benchmarked to ‘CNX Midcap Index’, isnot sponsored, endorsed, sold or promoted by India Index Services &

Products Limited (IISL). IISL is not responsible for any errors oromissions or the results obtained from the use of such index and in noevent shall IISL have any liability to any party for any damages ofwhatsoever nature (including lost profits) resulted to such party due topurchase or sale or otherwise the Scheme benchmarked to such index.

u In the event that investible funds of more than 50% of the totalproceeds in the Scheme are not invested in equity shares of domesticcompanies, the tax exemption on income distribution will not beavailable to the Unit Holders.

u Subject to the stated investment objective, the Scheme proposes toinvest in equity and equity related securities. Equity securities by natureare volatile and prone to price fluctuations on a daily basis due to bothmacro and micro factors. The volatility of medium / small - capitalisationstocks may be higher in comparison to liquid large capitalisation stocks.Trading volumes, settlement periods and transfer procedures mayrestrict the liquidity of these investments. Different segments offinancial markets have different settlement periods and such periodsmay be extended significantly by unforeseen circumstances. Theinability of the Scheme to make intended securities’ purchases due tosettlement problems could cause the Scheme to miss certaininvestment opportunities.

u The NAV of the Scheme will reduce daily to the extent of Rs. 0.0005*due to amortization of initial issued expenses.

* The amount of Rs. 0.0005 is based on the assumption that theexpenses charged are @6% of the amount mobilised and out ofthe said 6%, Initial Issue expenses upto 4.00% of the initialresources raised will be charged to the Scheme upfront and thebalance Initial Issue expenses up to 2.00% of the initial resourcesraised will be amortized over a period not exceeding one year.The number of days for amortisation will be 365 and is subject toincrease or decrease based on the corpus of the Scheme. Fordetails on “Initial Issue Expenses” please refer page no 31.

u Derivatives : The Scheme may also use various derivative and hedgingproducts from time to time, as permitted under the SEBI Regulationsand guidelines, in an attempt to protect the value of the portfolio andenhance Unitholders’ interest.

As and when the Scheme trades in the derivatives market there arerisk factors and issues concerning the use of derivatives that investorsshould understand. Derivative products are specialised instrumentsthat require investment techniques and risk analysis different fromthose associated with stocks and bonds. The use of a derivative requiresan understanding not only of the underlying instrument but also of thederivative itself. Derivatives require the maintenance of adequatecontrols to monitor the transactions entered into, the ability to assessthe risk that a derivative adds to the portfolio and the ability to forecastprice or interest rate movements correctly. Other risks in usingderivatives include the risk of mispricing or improper valuation ofderivatives and the inability of derivatives to correlate perfectly withunderlying assets, rates and indices. Thus, derivatives are highlyleveraged instruments. Even a small price movement in the underlyinginstrument could have a large impact on their value. Also, the marketfor derivative instruments is nascent in India.

u From time to time and subject to the SEBI Regulations, the Sponsor,their affiliates, associates, subsidiaries, the Mutual Fund and the AMCmay invest directly or indirectly in the Scheme. These entities mayacquire a substantial portion of the Scheme’s Units and collectivelyconstitute a major investor in the Scheme. Accordingly, redemption ofUnits held by such entities may have an adverse impact on the Schemebecause the timing of such redemption may impact the ability of otherUnitholders to redeem their Units.

u The tax benefits described in this Offer Document are as availableunder the prevailing taxation laws. The information given is includedonly for general purpose and is based on the advice received by theAMC regarding the laws and practise currently in force in India.Investors / Unitholders should be aware that the relevant fiscal rulesor their interpretation may change. As is the case with any investment,there can be no guarantee that the tax position or the proposed taxposition prevailing at the time of an investment in the Scheme willendure indefinitely. In view of the individual nature of tax consequences,each Unitholder is advised to consult his / her / their own professionaltax advisor.

u Redemption by the Unitholder due to change in the fundamentalattributes of the Scheme or due to any other reasons or Winding-up ofthe Scheme for reasons mentioned in this Document may entail taxconsequences. The Trustee, AMC, Mutual Fund, their Directors, officersor their employees shall not be liable for any such tax consequencesthat may arise.

u Investment decisions made by the AMC may not always be profitable.

u As the liquidity of the investments made by the Scheme could, at

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times, be restricted by trading volumes and settlement periods, thetime taken by the Mutual Fund for Redemption of Units may besignificant in the event of an inordinately large number of Redemptionrequests or of a restructuring of the Scheme. In view of the above, theTrustee has the right, in its sole discretion, to limit Redemptions(including suspending Redemptions) under certain circumstances, asdescribed under the sections titled “Right to Limit / WithholdRedemptions” on page 30 and “Suspension of Sale / Redemption /Switching Options of the Units” on page 30.

As indicated on page 15 under the Asset Allocation Table, the Schemeproposes to invest in debt and related instruments.

– Price-Risk or Interest Rate Risk : As with all debt instruments, changesin interest rates may affect the NAV of the Scheme as the prices ofinstruments increase as interest rates decline and decrease as interestrates rise. Prices of long-term instruments generally fluctuate more inresponse to interest rate changes than of short-term instruments. Indiandebt markets can be volatile leading to the possibility of pricemovements up or down in fixed income instruments and thereby topossible movements in the NAV.

– Basis Risk : As the Scheme may invest in floating rate instruments,these instruments’ coupon will be reset periodically in line with thebenchmark index movement. Normally, the interest rate risk of a floatingrate instrument compared to a fixed rate instrument is limited. Thechanges in the prevailing rates of interest will likely affect the value ofthe Scheme’s holdings until the next reset date and thus the value ofthe Scheme’s Units. Increased rates of interest, may have a negativeeffect on the value of the Units. The value of instruments held by theScheme may vary inversely with changes in the prevailing interest rates.The Scheme could be exposed to the interest rate risk (i) to the extentof time gap in resetting of the benchmark rates, and (ii) to the extentthe benchmark index fails to capture the interest rate movement.

– Spread Risk : Though the basis (i.e. benchmark) gets readjusted on aregular basis, the spread (i.e. markup) over benchmark remainsconstant. This can result in some volatility to the holding period returnof floating rate instruments.

– Settlement Risk (Counterparty Risk) : The floating rate assets mayalso be created by swapping a fixed return to a floating rate return. Insuch a swap, there may be an additional risk on the counterparty whowill pay floating rate return and receive fixed rate return.

– Liquidity or Marketability Risk : This refers to the ease with which aninstrument can be sold at or near to its valuation yield to- maturity(YTM). The primary measure of liquidity risk is the spread between thebid price and the offer price quoted by a dealer. Liquidity risk is todaythe characteristic of the Indian fixed income market.

– Credit Risk : Credit risk or default risk refers to the risk that an issuerof a fixed income instrument may default (i.e. will be unable to maketimely principal and interest payments on the instrument). Because ofthis risk, corporate debentures are sold at a yield above those offeredon Government Securities, which are sovereign obligations. Normally,the value of a fixed income instrument will fluctuate depending uponthe changes in the perceived level of credit risk as well as any actualevent of default. The greater the credit risk, the greater the yield requiredfor someone to be compensated for the increased risk.

– Reinvestment Risk : This risk refers to the interest rate levels at whichcash flows received from the instruments in the Scheme are reinvested.The additional income from reinvestment is the “interest on interest”component. The risk is that the rate at which interim cash flows canbe reinvested may be lower than that originally assumed.

– Credit Risk : Credit risk refers to the risk of default in timely paymentof interest or principal. Apart from the risk of loss on default, the priceof a security may decline based on the perception of credit worthinessof the issuer. Investments in bonds and debentures will usually be ininstruments that have been assigned high investment grade ratingsby a recognised rating agency.

– Interest Rate Risk : The fixed rate investments of the scheme may besubject to interest rate risk. The price of a fixed rate instrumentfluctuates with the prevailing level of interest rates in the market. Asyields increase or decrease, the price of existing fixed rate instrumentsdecrease or increase. The price fluctuation depends on the duration ofthe instrument and the change in interest rates.

u· The Scheme may, considering the overall level of risk of the portfolio,invest in lower rated / unrated securities offering higher yields. Thismay increase the absolute level of risk of the portfolio.

u As zero coupon securities do not provide periodic interest paymentsto the holder of the security, these securities are more sensitive tochanges in interest rates. Therefore, the interest rate risk of zero couponsecurities is higher. The Scheme may choose to invest in zero couponsecurities that offer attractive yields. This may increase the risk of theportfolio.

u· Securities which are not quoted on the stock exchanges are inherentlyilliquid in nature and carry a larger amount of liquidity risk, in comparisonto securities that are listed on the exchanges or offer other exit optionsto the investor, including a put option. The Scheme may choose toinvest in unlisted securities that offer attractive yields. This may increasethe risk of the portfolio.

u While securities that are listed on the stock exchange carry lowerliquidity risk, the ability to sell these investments is limited by the overalltrading volume on the stock exchanges. Money market securities, whilefairly liquid, lack a well-developed secondary market, which may restrictthe selling ability of the Scheme and may lead to the Scheme incurringlosses till the security is finally sold.

u Investors should study this Offer Document carefully in its entiretyand should not construe the contents hereof as advice relating to legal,taxation, investment or any other matters. Investors are advised toconsult their legal, tax, investment and other professional advisors todetermine possible legal, tax, financial or other considerations ofsubscribing to or redeeming Units, before making a decision to invest /redeem Units.

u Neither this Offer Document nor the Units have been registered in anyjurisdiction. The distribution of this Offer Document in certainjurisdictions may be restricted or totally prohibited to registrationrequirements and accordingly, persons who come into possession ofthis Offer Document are required to inform themselves about and toobserve any such restrictions and or legal compliance requirements.

u No person has been authorised to issue any advertisement or to giveany information, either oral or written to make any representationsother than that contained in this Offer Document. Circulars in connectionwith this offering not authorised by the Mutual Fund / Trustee / AMCand any information or representations not contained herein must notbe relied upon as having been authorised by the Mutual Fund / Trustee /AMC.

u The allotment of Units under the Scheme will be subject to SEBI circulardated December 12, 2003 read with circular dated June 14, 2005 andsuch other circulars issued by SEBI/ operating guidelines issued byAMFI from time to time. The AMC / Mutual Fund will not be responsiblein any manner, due to the loss sufferred / denial of tax benefits to theinvestor due to applicability of the aforesaid circular. As per SEBI circulardated December 12, 2003 ref SEBI/IMD/CIR No. 10/22701/03, eachScheme and individual Plan(s) under the Scheme should have aminimum of 20 investors. In case of non-fulfilment with this conditionin a three months time period or the end of succeeding calendar quarter,whichever is earlier, from the close of the New Fund Offer Period ofthe Scheme or on an on-going basis for each calendar quarter, theScheme / Plan(s) shall be wound up in accordance with the guidelinesprescribed by SEBI.

However as per SEBI circular dated June 14, 2005 ref SEBI/IMD/CIRNo.1/42529/05, determining the breach of the 25 % limit by an Investor– The average net assets of the scheme would be calculated daily andany breach of the 25% holding limit by an investor would be determined.At the end of the quarter, the average of daily holding by each suchinvestor is computed to determine whether that investor has breachedthe 25 % limit over the quarter. If there is a breach of limit by anyinvestor over the quarter, a rebalancing period of one month would beallowed and thereafter the investor who is in breach of the rule shallbe given 15 days notice to redeem his exposure over the 25 % limit.Failure on the part of the said investor to redeem his exposure overthe 25 % limit within the aforesaid 15 days would lead to automaticredemption by the Mutual Fund on the applicable Net Asset Value onthe 15th day of the notice period. All other provisions of the SEBI circulardated December 12, 2003 remain unchanged.

Further, the aforesaid SEBI circulars would be applicable at the Portfoliolevel.

u· ADRs / GDRs / Foreign Securities : It is the AMC’s belief thatinvestment in ADRs / GDRs issued by Indian Companies andinvestment in foreign securities offer new investment and portfoliodiversification opportunities into multi-market and multi-currencyproducts. However, such investments also entail additional risks. Suchinvestment opportunities may be pursued by the AMC provided theyare considered appropriate in terms of the overall investment objectivesof the Scheme. Since the Scheme would invest only partially in ADRs/ GDRs issued by Indian Companies and foreign securities, there maynot be readily available and widely accepted benchmarks to measureperformance of the Scheme. To manage risks associated with foreigncurrency and interest rate exposure, the Scheme may use derivativesfor efficient portfolio management including hedging and in accordancewith conditions as may be stipulated by SEBI from time to time.

Offshore investments will be made subject to any / all approvals,conditions thereof as may be stipulated by SEBI and provided such

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investments do not result in expenses to the Scheme in excess ofpermissible ceiling of expenses and consistent with costs and expensesattendant to international investing. The Mutual Fund may, wherenecessary, appoint other intermediaries of repute as advisors,custodian/sub-custodians etc. for managing and administering suchinvestments. The appointment of such intermediaries shall be inaccordance with the applicable requirements of SEBI and within thepermissible ceiling of expenses. The fees and expenses wouldillustratively include, besides the investment management fees,custody fees and costs, fees of appointed advisors and sub-managers,transaction costs and overseas regulatory costs.

To the extent that the assets of the Scheme will be invested in securitiesdenominated in foreign currencies, the Indian Rupee equivalent of thenet assets, distributions and income may be adversely affected bychanges in the value of certain foreign currencies relative to the IndianRupee. The repatriation of capital to India may also be hampered bychanges in regulations concerning exchange controls or politicalcircumstances as well as the application to it of other restrictions oninvestment.

u Securities Lending : The risks in lending portfolio securities, as withother extensions of credit, consist of the failure of another party, inthis case the approved intermediary, to comply with the terms ofagreement entered into between the lender of securities i.e. theScheme and the approved intermediary. Such failure to comply canresult in the possible loss of rights in the collateral put up by theborrower of the securities, the inability of the approved intermediaryto return the securities deposited by the lender and the possible lossof any corporate benefits accruing to the lender from the securitiesdeposited with the approved intermediary. The Mutual Fund may notbe able to sell such lent securities and this can lead to temporaryilliquidity.

u Risk associated with Securitised Debt:

Scheme may invest in domestic securitized debt such as asset backedsecurities (ABS) or mortgage backed securities (MBS). Asset BackedSecurities (ABS) are securitized debts where the underlying assetsare receivables arising from automobile loans, personal loans, loansagainst consumer durables, etc. Mortgage backed securities (MBS)are securitized debts where the underlying assets are receivables arisingfrom loans backed by mortgage of residential / commercial properties.ABS/MBS instruments reflect the undivided interest in the underlyingpool of assets and do not represent the obligation of the issuer ofABS/MBS or the originator of the underlying receivables. The ABS/MBS holders have a limited recourse to the extent of creditenhancement provided. If the delinquencies and credit losses in theunderlying pool exceed the credit enhancement provided, ABS/MBSholders will suffer credit losses. ABS/MBS are also normally exposedto a higher level of reinvestment risk as compared to the normalcorporate or sovereign debt. Following are some of the types of loansthat are amortised :

u Auto Loans (cars / commercial vehicles / two vehicles)

u Residential Mortgages or Housing Loans

u Consumer Durable Loans

u Personal Loans and Credit Cards

The main risks pertaining to each of the asset classes above aredescribed below:

Auto Loans (cars / commercial vehicles / two vehicles)

u The underlying assets (cars etc) are susceptible to depreciationin value whereas the loans are given at high loan to value ratios.Thus, after a few months, the value of asset becomes lower thanthe loan outstanding. The borrowers, therefore, may sometimestend to default on loans and allow the vehicle to be repossessed.

u These loans are also subject to model risk. ie if a particularautomobile model does not become popular, loans given forfinancing that model have a much higher likelihood of turning bad.In such cases, loss on sale of repossession vehicles is higherthan usual.

u Commercial vehicle loans are susceptible to the cyclicality in theeconomy. In a downturn in economy, freight rates drop leadingto higher defaults in commercial vehicle loans. Further, the secondhand prices of these vehicles also decline in such economicenvironment.

Housing Loans

· u Housing loans in India have shown very low default rateshistorically. However, in recent years, loans have been given athigh loan to value ratios and to a much younger borrower classes.The loans have not yet gone through the full economic cycle andhave not yet seen a period of declining property prices. Thus theperformance of these housing loans is yet to be tested and itneed not conform to the historical experience of low default rates.

Consumer Durable Loans

u The underlying security for such loans is easily transferable withoutthe bank’s knowledge and hence repossession is difficult.

u The underlying security for such loans is also susceptible to quickdepreciation in value. This gives the borrowers a high incentiveto default.

Personal Loans and Credit Cards

u These are unsecured loans. In case of a default, the bank has nosecurity to fall back on.

u The lender has no control over how the borrower has used theborrowed money.

Further, all the above categories of loans have the following

common risks:

u All the above loans are retail, relatively small value loans. There isa possibility that the borrower takes different loans using the sameincome proof and thus the income is not sufficient to meet thedebt service obligations of all these loans.

u In India, there is no ready database available regarding past creditrecord of borrowers. Thus, loans may be given to borrowers withpoor credit record.

In retail loans, the risks due to frauds are high.

Subject to the stated investment objective, the Scheme proposes to investin debt and related instruments.

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DEFINITIONS

In this Offer Document, the following words and expressions shall have the meaning specified herein, unless the context otherwise requires:

“AAFLF” ABN AMRO Future Leaders Fund

“AAFTP-1” ABN AMRO Fixed Term Plan – Series 1

“AAFTP-2 : QA” ABN AMRO Fixed Term Plan – Series 2 : Quarterly Plan A

“AALTFRF” ABN AMRO Long Term Floating Rate Fund

“AAEF” ABN AMRO Equity Fund

“AAMIP” ABN AMRO Monthly Income Plan

“AAFDF” ABN AMRO Flexi Debt Fund

“AAFRF” ABN AMRO Floating Rate Fund

“AACF” ABN AMRO Cash Fund

“AAOF” ABN AMRO Opportunities Fund

“AADYF” ABN AMRO Dividend Yield Fund

“AATAP” ABN AMRO Tax Advantage Plan (ELSS)

“AMC” or “Asset Management ABN AMRO Asset Management (India) Limited, a company incorporated under the provisions of the CompaniesCompany” or “Investment Manager” Act, 1956 and approved by SEBI to act as the Asset Management Company for the Scheme of the Mutual Fund.

“Applicable NAV” Unless otherwise stated, the NAV of the Scheme / Plan(s) / Option(s) applicable for Redemption / Repurchase, orSwitches, as the context may require, based on the time and day on which the application is accepted. (For detailsplease refer page no. 29 for “Applicable NAV for Redemption / Repurchase of Units”).

“Business Day” A day other than:

(i) Saturday and Sunday

(ii) A day on which the banks in Mumbai and / or RBI are closed for business / clearing

(iii) A day on which the Stock Exchange, Mumbai and / or the National Stock Exchange of India Limited areclosed

(iv) A day which is a public and /or bank holiday at the Investor Service Centre where the application is received,

(v) A day on which Sale and Redemption/ repurchase of Units is suspended by the Trustee / AMC

(vi) A book closure period as may be announced by the Trustee / AMC.

(vii) A day on which normal business cannot be transacted due to storms, floods, bandhs, strikes or such otherevents as the Trustee / AMC may specify from time to time.

The Trustee / AMC reserves the right to change the definition of Business Day(s). The Trustee / AMC reserves theright to declare any day as a Business Day or otherwise at any or all Investor Service Centres.

“CDSC” or ”Contingent Contingent Deferred Sales Charge permitted under the SEBI Regulations to be borne by the Unitholder uponDeferred Sales Charge” exiting (whether by way of redemption or Inter-scheme switching) based on the amount of investment (if applicable)

and period of holding of Units.

“Custodian” Deutsche Bank AG, Mumbai, registered under the SEBI (Custodian of Securities) Regulations, 1996, currentlyacting as Custodian to the Scheme or any other custodian approved by the Trustees.

“Depository” Depository as defined in the Depositories Act, 1996 (22 of 1996).

“Dividend” Income distributed by the Scheme on the Units, where applicable.

“Entry Load” or “Sales Load” Load on Sale / Switch-in of Units.

“Exit Load” or “Redemption Load” Load on Redemption / repurchase / Switch-out of Units.

“FII” Foreign Institutional Investors, registered with SEBI under the Securities and Exchange Board of India (ForeignInstitutional Investors) Regulations, 1995, as amended from time to time.

“Floating Rate Debt Instruments” Floating rate debt instruments are debt securities issued by Central and / or State Government, Corporate Bodiesor PSUs with interest rates that are reset periodically. The periodicity of the interest reset could be daily, monthly,quarterly, half-yearly, annually or any other periodicity that may be mutually agreed with the issuer and the MutualFund. Floating rate debt instruments which can be synthetically created by swapping Money Market Instruments& Fixed Rate Debt Instruments for floating rate returns.

The interest payable on the instruments could also be in the nature of a fixed spread over benchmark yields.

“Future Leaders” Any company, which has a market capitalisation below that of the 99th stock in BSE 500 Index, and may or may notbe a constituent of the BSE 500 index.

“Gilts” or “Government Securities” Securities created and issued by the Central Government and / or a State Government (including Treasury Bills) orGovernment Securities as defined in the Public Debt Act, 1944, as amended or re-enacted from time to time.

“Investor Service Centres” or “ISCs” Designated branches or service centres or representative offices of Registrar and Transfer Agent or it’s associatesor such other centres / offices as may be designated by the Trustee / AMC from time to time.

“New Fund Offer” Offer for Subscription of Units of ABN AMRO Future Leaders Fund during the New Fund Offer Period as describedhereinafter.

“New Fund Offer Period” The date / period during which the Initial Subscription of Units of the Scheme mentioned below can be made.

“Investment Management The agreement dated April 15, 2004 entered into between ABN AMRO Trustee (India) Private Limited and ABNAgreement” or “IMA” AMRO Asset Management (India) Limited, as amended from time to time.

“Load” A charge that may be levied as a percentage of NAV at the time of entry into the Scheme or at the time of exitingfrom the Scheme.

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“Local Cheque” A cheque handled locally and drawn on any bank which is a member of the Banker’s Clearing House located at thedesignated official points of acceptance of transactions, where the application form is submitted.

“Market Capitalisation“ Market value of a listed company, which is calculated by multiplying its current market price by number of itsshares outstanding.

“Mutual Fund” or “the Fund” ABN AMRO Mutual Fund, a trust set up under the provisions of the Indian Trusts Act, 1882 and registered withSEBI under the Securities Regulations vide. Registration No. MF/049/04/01 dated May 27, 2004.

“NAV“ Net Asset Value per Unit of the Scheme, calculated in the manner described in this Offer Document or as may beprescribed by the SEBI Regulations from time to time.

“NRI” A Non-Resident Indian means a person resident outside India who is a citizen of India or is a person of Indian origin.

“Offer Document” This document issued by the Mutual Fund offering the Units of the Scheme for Subscription.

“RBI” Reserve Bank of India, established under the Reserve Bank of India Act, 1934.

“Registrar and Transfer Agent” Computer Age Management Services (P) Limited (CAMS), Chennai, registered under the Securities and ExchangeBoard of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993, currently acting as registrarand transfer agent to the Scheme, or any other registrar and transfer agent appointed by the Mutual Fund actingthrough the AMC from time to time.

“Repurchase” / “Redemption” Redemption of Units of the Scheme as permitted at maturity / repurchase of units on the dates period during whichunits will be repurchased by the Fund.

“Sale“ / “Subscription” Sale of Units to the Unitholder upon Subscription by the Investor / Applicant under the Scheme during the NewFund Offer Period.

“Scheme“ / “Plan” ABN AMRO Future Leaders Fund and the Plan(s) / Option(s) offered thereunder.

“SEBI” Securities and Exchange Board of India, established under the Securities and Exchange Board of India Act, 1992.

“SEBI Regulations” or “Regulations” Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, as amended from time to time.

“Sponsor” or “Settlor” ABN AMRO Asset Management (Asia) Limited.

“Trust Deed” The Trust Deed dated April 15, 2004 made by and between ABN AMRO Bank N.V. and ABN AMRO Trustee (India)Private Limited, establishing the Mutual Fund, as amended from time to time.

“Trustee” ABN AMRO Trustee (India) Private Limited, incorporated under the provisions of the Companies Act, 1956 andapproved by SEBI to act as the Trustee to the Scheme of the Mutual Fund.

“Unit” The interest of the Unitholder which consists of each Unit representing one undivided share in the net assets of theScheme.

“Unitholder” or “Investor” A person holding Unit(s) in the Scheme of the Mutual Fund.

Interpretation

For all purposes of this Offer Document, except as otherwise expressly provided or unless the context otherwise requires :

u All references to the masculine shall include the feminine and all references, to the singular shall include the plural and vice-versa.

u All references to “Euros” refer to the currency of some Member States of the European Union, “dollars” or “$” refer to United States Dollars and“Re.” / “Rs.” refers to Indian Rupee(s). A “crore” means “ten million” and a “lakh” means a “hundred thousand”.

Words and Expressions used and not defined in this Offer Document shall have the same meaning as in the SEBI Regulations.

DUE DILIGENCE BY THE ASSET MANAGEMENT COMPANY

A Due Diligence Certificate duly signed by the Head - Compliance & Risk Management of ABN AMRO Asset Management (India) Limited has beensubmitted to SEBI on January 5, 2006, which reads as follows.

It is confirmed that:

(i) The draft Offer Document forwarded to SEBI is in accordance with the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 andthe guidelines and directives issued by SEBI from time to time.

(ii) All legal requirements connected with the launching of the Scheme as also the guidelines, instructions, etc. issued by the Government of India and anyother competent authority in this behalf, have been duly complied with.

(iii) The disclosures made in this Offer Document are true, fair and adequate to enable the investors to make a well-informed decision regarding investmentsin the proposed Scheme.

(iv) The intermediaries named in this Offer Document are registered with SEBI and till date such registrations are valid.

Place : Mumbai Signed : Sd / -Date : January 5, 2006 Name : Abhaya Joglekar

Designation : Head - Compliance & Risk Management

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SECTION I

SUMMARY OF THE SCHEME

Name of the Scheme ABN AMRO Future Leaders Fund

Structure An Open-Ended Equity Scheme with no assured returns

Features To seek to generate long-term capital appreciation by investing primarily in companies with high growth opportunitiesin the middle and small capitalization segment, defined as ‘Future Leaders’. The fund will emphasize on companiesthat appear to offer opportunities for long-term growth and will be inclined towards companies that are driven bydynamic style of management and entrepreneurial flair

Plans and Options The Scheme offers Regular Plan:under the Scheme This Plan offers Growth Option and Dividend Option.

The Dividend Option offers Dividend Payout and Dividend Re-investment facilities.

Application Amount u Regular Plan - Growth Option and Dividend Option :

A minimum of Rs. 5000 and in multiples of Re.1 thereafter. There is no upper limit. Additional amount of investmentwould be Rs.1000 and in multiples of Re.1 thereafter.

New Fund Offer Price Rs. 10 per Unit

Target Amount The Mutual Fund seeks to raise a minimum subscription amount of Rs. 1 Crore under the Regular Plan during the NewFund Offer Period of the Scheme and would retain any excess subscription collected.

Load Structure u Entry Load :

There is no Entry Load

° u Contingent Deferred Sales Charge :

u In respect of each Subscription / Switch - In of Units for an amount less than Rs. 5 crores in value:

– 1.5% if units are redeemed / switched out within and upto 6 months from the date of allotment

– 0.75% if units are redeemed / switched out after 6 months but before 12 months from the date of allotment

u In respect of each Subscription / Switch - In of Units for an amount equal to Rs. 5 crores in values or more:

– 2.25% if units are redeemed / switched out within and upto 12 months from the date of allotment

u Exit Load :

There is no Exit Load

On an on-going basis, the Scheme may have maximum Load imposed on Purchases/ redemption could be upto 7%subject to the condition that the difference between the Redemption Price and Sale Price of the Unit shall not exceedthe permissible limit of 7% of the Sale Price.

Any CDSC charged to the Unitholders will be credited back to the fund simultaneously or in such other manner asAMC may decide from time to time.

Duration of New Fund Offer The offer for Subscription of the Units of the Scheme will be open for initial subscription from March 13, 2006 toApril 7, 2006. The Trustee reserves the right to extend the closing date of the New Fund Offer Period for the Scheme,subject to the condition that the subscription list shall not be kept open for more than 30 days.

Liquidity The Scheme will offer for Sale and Redemption the Units on every Business Day on an ongoing basis, commencingnot later than 30 days from the closure of New Fund Offer Period.

Units can be redeemed (i.e. sold back to the Mutual Fund) on or Switched out (i.e. to another scheme of the MutualFund or Option(s) offered within the Scheme, if any) every Business Day, at the Applicable NAV subject to applicableLoad, if any.

The Units of the Scheme will not be listed on any exchange, for the present.

As per the SEBI Regulations, the Mutual Fund shall despatch Redemption proceeds within 10 Business Days ofreceiving the Redemption/ repurchase request. A penal interest of 15% per annum or such other rate as may beprescribed by SEBI from time to time, will be paid in case the Redemption proceeds are not despatched within 10Business Days of the date of Redemption request.

However, under normal circumstances, the Mutual Fund will endeavour to despatch the Repurchase proceeds within3 Business Days from the acceptance of the Repurchase request.

Transparency The AMC will disclose the first NAV of the Scheme not later than 30 days from the closure of New Fund Offer Period.Subsequently, the NAV will be disclosed at the close of every Business Day and released to the Press, News Agenciesand the Association of Mutual Funds of India (AMFI) except in case of “Suspension of Redemption / Repurchase /Switching Options of the Units” described on page 30. NAVs will also be displayed on the website of the AMCwww.assetmanagement.abnamro.co.in.

The AMC will disclose broad details of the portfolio of the Scheme on a quarterly basis on the website of the AMCwww.assetmanagement.abnamro.co.in. As presently required by the SEBI Regulations, a complete statement ofthe Scheme portfolio would be published by the Mutual Fund as an advertisement in a newspaper within one monthfrom the close of each half year (i.e. March 31 & September 30) or mailed to the Unitholders.

The AMC shall update the NAVs on the website of Association of Mutual Funds in India – AMFI (www.amfiindia.com)and the website of the AMC www.assetmanagement.abnamro.co.in by 8.00 p.m. everyday. In case of any delay,the reasons for such delay would be explained to AMFI and SEBI by the next day. If the NAVs are not available before9.30 a.m. on the following day due to any reason, the Mutual Fund shall issue a press release providing reasons andexplaining when the Mutual Fund would be able to publish the NAVs.

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CONSTITUTION OF THE MUTUAL FUND

THE MUTUAL FUND

ABN AMRO Mutual Fund has been constituted as a trust in accordancewith the provisions of the Indian Trusts Act, 1882, by the Sponsor, as perthe terms of the Trust Deed dated April 15, 2004. The Trust Deed has beenregistered under the Indian Registration Act, 1908. The Mutual Fund hasbeen registered with SEBI, vide. Registration No. MF/049/04/01 datedMay 27, 2004.

The office of the Mutual Fund is at 101, 10th Floor, Sakhar Bhavan, NarimanPoint, Mumbai 400 021.

The Mutual Fund has been formed with the purpose of pooling capital fromthe public for collective investment in securities / any other property for thepurpose of providing facilities for participation by persons as beneficiaries insuch properties / investments and in the profits / income arising therefrombeyond this contribution.

THE SPONSOR

Consequent to receipt of no-objection letter received from SEBI (its letterno. IMD/SB/46021/05 dated August 4, 2005), the controlling interest in theAMC was transferred from ABN AMRO Bank N.V. to ABN AMRO AssetManagement (Asia) Limited (“AAAM Asia”) with effect from October 31,2005.

AAAM Asia holds 75% of the paid-up equity share capital of the AMC. Inview of the same details of AAAM Asia are being provided hereunder.

Given below is a brief summary of AAAM Asia's financials in the last threeyears as on December 31 :

Description 2004 2003 2002

Turnover / Total Income(in millions of HKD) 181.2 141 123.4

Profit After Tax (in millions of HKD) 27.4 25.6 17.8

Equity Capital (in millions of HKD) 300 19.9 19.9

Free Reserves (in millions of HKD) 79.9 52.5 26.8

Net Worth (in millions of HKD) 379.9 157.3 131.7

Earning Per Share (HKD) 0.09 1.29 0.89

Book Value Per Share (HKD) 1.27 7.9 6.6

Percentage of Dividend Paid 0 0 0

Notes :

(1) Free Reserves are Other Reserves of the Sponsor and do not includeShare premium account, Revaluation reserves and Other Reservesprescribed by law.

(2) Net-worth means aggregate of Equity Capital and all Reserves of theSponsor.

AAAM Asia was incorporated in Hong Kong on 29 October 1991 and islicensed with the Securities and Futures Commission to conduct Type 1(dealing in securities), Type 4 (advising on securities), Type 5 (advising onfutures contracts) and Type 9 (asset management) regulated activities underthe Securities and Futures Ordinance.

AAAM Asia is a wholly owned subsidiary of ABN AMRO Holding N.V.,incorporated in the Netherlands. AAAM Asia specializes in the Asian marketsfor both investment funds’ advisory and discretionary mandates. It alsopromotes ABN AMRO’s global products in the Asian region to bothinstitutional investors and private clients. AAAM Asia is the Asian assetmanagement centre for ABN AMRO’s global asset management business.

ABN AMRO Bank N.V. in 2004 had contributed an amount of Rs. 1,00,000(Rupees One Lakh Only) to the corpus of the Mutual Fund. AAAM Asia isnot liable or responsible for any loss or shortfall resulting from the operationsof the Schemes.

THE TRUSTEE

ABN AMRO Trustee (India) Private Limited, a company incorporated underthe Companies Act, 1956, on November 4, 2003, is appointed as the Trusteeto the Mutual Fund vide the Trust Deed dated April 15, 2004. ABN AMROTrustee (India) Private Limited is a subsidiary of ABN AMRO AssetManagement (Asia) Limited.

The registered office of the Trustee is situated at 101, 10th Floor, SakharBhavan, Nariman Point, Mumbai 400 021.

TRUSTEE - FEES AND EXPENSES

Pursuant to the Trust Deed constituting the Mutual Fund, the Trustee inaddition to reimbursement of all costs, charges and expenses incurred in orabout the administration and execution of the Mutual Fund, is entitled toreceive a fee computed at a rate specified in the individual Scheme offerdocument, subject to a maximum of Rs. 10,00,000 (Rupees Ten Lakhs) per

annum. The Trustee may charge further fees as permitted from time totime under the Trust Deed and the SEBI Regulations.

SUMMARY OF THE SUBSTANTIVE PROVISIONS OF THE TRUSTDEED

The Trust Deed dated April 15, 2004 contains, among others, the followingclauses that may be of material interest to the investor:

u It shall be the responsibility of the Trustee in carrying out itsresponsibilities to maintain arms’ length relationship with othercompanies or institutions or financial intermediaries or any bodycorporate with which the Trustee may be associated.

u It shall be the duty of the Trustee to take into its custody or under theircontrol all the property of the Schemes of the Mutual Fund and holdthese in trust for the Unitholders. The Trustee shall be accountable forand be the custodian of the funds and property of the Schemes andshall hold the same for the benefit of the Unitholders in accordancewith the SEBI regulations and the provisions of the Trust Deed.

u It shall be the duty of the Trustee to act in the interest of the Unitholders.

u It shall be the duty of the Trustee to provide or cause to provideinformation to the Unitholders and SEBI as may be required by SEBIfrom time to time

u The Trustee shall supervise the collection of any income due to bepaid to the Scheme of the Mutual Fund and for claiming any repaymentof tax and holding any income received in trust for the Unitholders inaccordance with the Trust Deed and the SEBI Regulations.

u The Trustee shall not acquire any asset out of the Mutual Fund whichinvolves the assumption of any liability which is unlimited or whichresults in encumbrance of the Mutual Fund in any way.

u It shall be the duty of the Trustee to take reasonable care to ensurethat the funds under the Schemes floated by and managed by theAMC are in accordance with the Trust Deed and the SEBI Regulations.

u The Sponsor or the Trustee shall be entitled by one or more Deed/ssupplemental to the Trust Deed to amend, modify, alter or add to theprovisions of the Trust Deed in such manner and to such extent asthey may consider expedient for any purpose, provided that:

(i) no such amendment, modification, alteration or addition shall bemade without the approval of the Unitholders and SEBI;

(ii) no such modification, alteration or addition shall impose upon anyUnitholder any obligation to make any further payment in respectof his Units or to accept any liability in respect thereof.

u Where the SEBI Regulations provide for seeking the approval of theUnitholders for any purpose, the Trustee may adopt any of the followingprocedures:

(i) Seeking approval by postal ballot or

(ii) Approval of the Unitholders present and voting at a meeting tobe specifically convened by the Trustee for the purpose. For thispurpose, the Trustees shall give 21 days notice to the Unitholdersand the Trustees may lay down guidelines for the actual conductand accomplishment of the voting at the meeting andannouncement of the results.

u The number of Directors of the Board shall not be less than 4 (or suchother number as specified by SEBI from time to time). Subject to theprovisions of the SEBI Regulations, at least two thirds of the Directorsof the Board shall be independent Directors and shall not be associatedwith the Sponsor or be associated with the Sponsor in any mannerwhatsoever.

u A Director shall not participate in the meetings of the Trustee or in anydecision making process for any investments in which he may beinterested.

u It shall be the duty of each Director to furnish to the Trustee, theparticulars of any interest which he may have in any other company orinstitution or financial intermediaries or any corporate body by virtue ofhis position as Director, partner or with which he may be associated inany other capacity.

u The Board shall meet atleast once every two calendar months andatleast six meetings of the Board shall be held in every year. The quorumfor such meeting shall be 2(two) Directors of the Board or 1/3 Directorswhich ever is higher. The quorum for the meetings of the Board shallalways include the presence of atleast one Independent Director.

u The Trustee shall have power to dismiss the Asset ManagementCompany under specific events only with the approval of SEBI inaccordance with the SEBI Regulations.

u The Trustee shall appoint a Custodian and enter into a custodianagreement on behalf of the Mutual Fund with the Custodian inaccordance with the SEBI Regulations and shall be responsible for thesupervision of its activities in relation to the Mutual Fund.

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RIGHTS, DUTIES AND RESPONSIBILITIES OF THE TRUSTEEUNDER THE SEBI REGULATIONS

Under the SEBI Regulations, the Trustee has, inter-alia, the following rights,duties and responsibilities :

u The Trustee shall have a right to obtain from the Asset ManagementCompany such information as is considered necessary by the Trustee.

u The Trustee shall ensure before the launch of any scheme that theAsset Management Company has-

(a) systems in place for its back office, dealing room and accounting;

(b) appointed all key personnel including fund manager(s) for theScheme and submitted their bio-data which shall contain theeducational qualifications, past experience in the securities marketwith the Trustee, within 15 days of their appointment;

(c) appointed auditors to audit its accounts;

(d) appointed a compliance officer who shall be responsible formonitoring the compliance of the Securities and Exchange Boardof India Act, 1992, rules and regulations, notifications, guidelinesinstructions etc issued by SEBI or the Central Government andfor redressal of investors’ grievances;

(e) appointed registrars and laid down parameters for theirsupervision;

(f) prepared a compliance manual and designed internal controlmechanisms including internal audit systems;

(g) specified norms for empanelment of brokers and marketingagents.

u The Trustee shall ensure that –

u the Asset Management Company has been diligent in empanellingthe brokers, in monitoring securities transactions with brokersand avoiding undue concentration of business with any broker;

u the Asset Management Company has not given any undue orunfair advantage to any associates or dealt with any of theassociates of the Asset Management Company in any mannerdetrimental to interest of the Unitholders;

u the transactions entered into by the Asset Management Companyare in accordance with the SEBI Regulations and the scheme;

u the Asset Management Company has been managing the MutualFund schemes independently of other activities and have takenadequate steps to ensure that the interest of investors of onescheme are not being compromised with those of any otherscheme or of other activities of the Asset Management Company;and

u all the activities of the Asset Management Company are inaccordance with the provisions of the SEBI Regulations.

u Where the Trustee have reason to believe that the conduct of businessof the Mutual Fund is not in accordance with the SEBI Regulations andthe scheme they shall forthwith take such remedial steps as arenecessary by them and shall immediately inform SEBI of the violationand the action taken by them.

u The Trustee shall take steps to ensure that the transactions of theMutual Fund are in accordance with the provisions of the Trust Deed.

u The Trustee shall be responsible for the calculation of any income dueto be paid to the Mutual Fund and also of any income received in theMutual Fund for the holders of the Units of any scheme in accordancewith the SEBI Regulations and the Trust Deed.

u The Trustee shall obtain the consent of the Unitholders;

u whenever required to do so by SEBI in the interest of theUnitholders; or

u whenever required to do so on the requisition made by three-fourths of the Unitholders of any scheme; or

u when the majority of the Board of Directors of the Trustee decideto wind up or prematurely redeem the Units.

u The Trustee shall ensure that no change in the fundamental attributesof any scheme or the trust or fees and expenses payable or any otherchange which would modify the scheme and affects the interest ofUnitholders, shall be carried out unless:

u a written communication about the proposed change is sent toeach Unitholder and an advertisement is given in one English dailynewspaper having nationwide circulation as well as in a newspaperpublished in the language of the region where the Head Office ofthe Mutual Fund is situated; and

u the Unitholders are given an option to exit at the prevailing NetAsset Value without any exit load.

u The Trustee shall quarterly review all transactions carried out betweenthe Mutual Fund, Asset Management Company and its associates.

u The Trustee shall quarterly review the networth of the AssetManagement Company and in case of any shortfall, ensure that theAsset Management Company make up for the shortfall as per clause(f) of sub-regulation (1) of SEBI Regulation 21.

u The Trustee shall periodically review all service contracts such ascustody arrangements, transfer agency of the securities and satisfyitself that such contracts are executed in the interest of the Unitholders.

u The Trustee shall ensure that there is no conflict of interest betweenthe manner of deployment of its networth by the Asset ManagementCompany and the interest of the Unitholders.

u The Trustee shall periodically review the investor complaints receivedand the redressal of the same by the Asset Management Company.

u The Trustee shall abide by the Code of Conduct as specified in theFifth Schedule to the SEBI Regulations.

u The Trustee shall exercise due diligence as under;

A. General Due Diligence:

i. The Trustee shall be discerning in the appointment of theDirectors on the Board of the Asset Management Company.

ii. Trustee shall review the desirability of continuance of theAsset Management Company if substantial irregularities areobserved in any of the schemes and shall not allow the AssetManagement Company to float new schemes.

iii. The Trustee shall ensure that the trust property is properlyprotected, held and administered by proper persons and bya proper number of such persons.

iv. The Trustee shall ensure that all service providers are holdingappropriate registrations from SEBI or concerned regulatoryauthority.

v. The Trustees shall arrange for test checks of servicecontracts.

vi. Trustees shall immediately report to SEBI of any specialdevelopments in the Mutual Fund.

B. Specific Due Diligence:

The Trustee shall:

i. obtain internal audit reports at regular intervals fromindependent auditors appointed by the Trustee.

ii. obtain compliance certificates at regular intervals from theAsset Management Company.

iii. hold meeting of Trustee more frequently.

iv. consider the reports of the independent auditor andcompliance reports of Asset Management Company at themeetings of Trustee for appropriate action.

v. maintain records of the decisions of the Trustee at theirmeetings and of the minutes of the meetings.

vi. prescribe and adhere to a code of ethics by the Trustee,Asset Management Company and its personnel.

vii. communicate in writing to the Asset Management Companyof the deficiencies and checking on the rectification ofdeficiencies.

u The independent Directors of the Trustee or Asset ManagementCompany shall pay specific attention to the following, as may beapplicable, namely:

i. the Investment Management Agreement and the compensationpaid under the agreement.

ii. service contracts with affiliates - whether the Asset ManagementCompany has charged higher fees than outside contractors forthe same services.

iii. selection of the Asset Management Company’s independentDirectors

iv. securities transactions involving affiliates to the extent suchtransactions are permitted.

v. selecting and nominating individuals to fill independent Directorsvacancies.

vi. code of ethics must be designed to prevent fraudulent, deceptiveor manipulative practices by insiders in connection with personalsecurities transactions.

vii. the reasonableness of fees paid to Sponsor, Asset ManagementCompany and any others for services provided.

11


viii principal underwriting contracts and their renewals.

ix. any service contract with the associates of the Asset ManagementCompany.

u Notwithstanding anything contained in the SEBI Regulations 18 (1) to18 (25), the Trustee shall not be held liable for acts done in good faithif they have exercised adequate due diligence honestly.

The supervisory role of the Trustee will be discharged by reviewing theinformation and the operations of the Mutual Fund based on the periodicreports submitted at the meetings of the Trustee and by reviewing the reportssubmitted by the Internal Auditor. The Trustee will also conduct a detailedreview of annual accounts of the Scheme of the Mutual Fund. Presently theBoard of Directors of Trustee is required to hold a meeting at least once in2 calendar months and at least 6 such meetings are required to be heldevery year. During the financial year 2004-2005 (April to March) the Trusteehad held 6 Board Meetings and during the current financial year the Trusteehas held 5 Board Meetings till the date of this document.

The Board of Directors of the Trustee has constituted an Audit Committee,comprising 3 independent Directors and 1 Associate Director of the Boardof Directors of the Trustee, pursuant to the SEBI circular MFD/CIR/ 010/024/2000 dated January 17, 2000.

The Trustee may require or give verification of identity or other detailsregarding any subscription or related information from / of the Unitholdersas may be required under any law, which may result in delay in dealing withthe applications, Units, benefits, distribution, etc.

DIRECTORS OF THE TRUSTEE

The Board of Directors of ABN AMRO Trustee (India) Private Limitedcomprises of the following eminent persons:

Mr. Pradip Nayak Other Directorships‘71 Antariksha, K. Gadgil Road, u GlaxoSmithKline PharmaceuticalsPrabhadevi, Mumbai - 400 025 Limited, Non-Executive Director

u Siemens India Limited, DirectorRetired Senior ExecutiveDirector – GlaxoSmithKlinePharmaceuticals Limited

Mr. Pradyumna Naware Other Directorships801A, Great Eastern Gardens, u Vila Housing Limited, DirectorL.B.S. Road, Kanjurmarg, u The Greatship Singapore Pte. Ltd.,Mumbai - 400 078 Director

President (Corporate) - u Greatship (India) Limited, DirectorThe Great Eastern Shipping u Deepwater Services (India) PrivateCo. Limited Limited, Director

u Routes Travel Limited – Director

Mr. Shariq Contractor Other DirectorshipsRewa Apartment, 2nd Floor, u Nasmona Farms Private Limited,Flat No. 23, Bhulabhai Desai DirectorRoad, Mumbai - 400 026 u Maurin Properties Private Limited,

DirectorPrincipal Partner - Contractor, u Island Properties Private Limited,Nayak & Kishnadwala, DirectorChartered Accountants

Mr. Gururajan Sethu Other Directorships10, Sutlej, Plot 21, Sector 14, u UTI Venture Funds ManagementVashi, Navi Mumbai - 400 703 Company Limited – Director

u OTCEI Securites Limited – DirectorProfessor, UTI Institute of u UTI Technology Services Limited -Capital Markets Director

Mr. Brijesh Mehra* Other Directorships171, Maker Tower B, NilCuffe Parade, Mumbai - 400 005.

Executive DirectorCountry Coverage Head, IndiaWholesale Clients – ABNAMRO Bank N.V.

* Associate Director i.e. Director associated with the Sponsor.

THE ASSET MANAGEMENT COMPANY

ABN AMRO Asset Management (India) Limited is a company incorporatedunder the Companies Act, 1956, on November 4, 2003, having its registeredoffice at 101, 10th Floor, Sakhar Bhavan, Nariman Point, Mumbai 400 021.ABN AMRO Asset Management (India) Limited is appointed as theInvestment Manager to the Mutual Fund vide the Investment ManagementAgreement dated April 15, 2004. Out of the paid-up equity share capital ofthe AMC of Rs. 30.36 crores, 75% is held by ABN AMRO Asset Management(Asia) Limited, 24.99% is held by Mr. J R Desai and the balance by residentindividual shareholders. Mr. Desai is the Chairman of Tropicana Enterprises(P) Limited, a company which is into distributing & marketing of a range of

electronic products. The details of ABN AMRO Asset Management (Asia)Limited, Sponsor is given on page 9.

SEBI approved the AMC to act as the Asset Management Company of theMutual Fund vide its letter No IMD/YK/11091/2004 dated May 28, 2004.

The AMC will manage the Scheme of the Mutual Fund as mentioned in thisOffer Document, in accordance with the provisions of the InvestmentManagement Agreement, the Trust Deed, the SEBI Regulations and theobjectives of the Scheme.

SEBI vide its letter no. IMD/SB/42486/2005 dated June 13, 2005 grantedno-objection to the AMC for providing research and non-binding advisoryservices to ABN AMRO Asset Management (Asia) Limited - Hongkong, fortheir offshore India Equity Fund. The offshore India Equity Fund is a Sub-Fundof ABN AMRO Funds. ABN AMRO Funds is registered pursuant to Part I ofthe Luxembourg Law of 30 March 1988 on Undertakings for CollectiveInvestment and qualifies as an Undertaking for Collective Investment inTransferable Securities under the Council Directive EC/85/611 for themarketing of its Shares in the Member States of the European Union. SEBIvide its letter no. IMD/FII/43187/2005 dated June 22, 2005 grantedregistration to the offshore India Equity Fund, as a sub-account of ABNAMRO Investment Funds S.A. (IN-LU-FA-0477-97), under SEBI (ForeignInstitutional Investors) Regulations, 1995. The AMC w.e.f. August 1, 2005renders research and non-binding advisory services to ABN AMRO AssetManagement (Asia) Limited - Hongkong, for their offshore India Equity Fundand in rendering the said services, there is no conflict of interest with theactivities of the Mutual Fund.

In accordance with the SEBI Regulations, an asset management company,subject to certain conditions, is also permitted to undertake activities in thenature of portfolio management services, management and advisory servicesto offshore funds, pension funds, provident funds, venture capital funds,management of insurance funds, financial consultancy and exchange ofresearch on commercial basis and such other activities as may be permittedby SEBI from time to time. The AMC may undertake any or all of theseactivities after satisfying itself that there is no potential conflict of interest.

ASSET MANAGEMENT FEES

As per the Investment Management Agreement and the SEBI Regulations,the AMC is entitled to an Investment Management and Advisory fee at therate of 1.25% per annum of the daily average net assets outstanding ineach accounting year for the Scheme, as long as the net assets do notexceed Rs. 100 crore and 1.00% of the excess amount over Rs. 100 crore,where net assets so calculated exceed Rs. 100 crore. For any Schemelaunched on a no load basis, the AMC is entitled to collect an additionalmanagement fee not exceeding 1% of the daily average net assetsoutstanding in each financial year. However such additional managementfees shall only be chargeable till the actual initial expenses borne by theAMC, limited to the maximum extent of 6% of the initial mobilisation, arerecovered.

Provided further, the AMC may charge such other Investment Managementand Advisory Fee as SEBI may prescribe / permit from time to time.

DUTIES AND RESPONSIBILITIES OF THE ASSET MANAGEMENTCOMPANY

The Duties and Responsibilities of the AMC shall be consistent with theSEBI Regulations and the Investment Management Agreement. The AMCshall discharge such duties and responsibilities as provided for under theSEBI Regulations and the Investment Management Agreement. The AMCshall, in the course of managing the affairs of the Mutual Fund, inter alia:

u Be responsible for formulating and floating one or more Schemes forthe Mutual Fund after approval of the same by SEBI, the Trustee andmanaging the funds mobilised under various Schemes, in accordancewith the provisions of the Trust Deed, investment guidelines if any laiddown by the Trustee from time to time, the SEBI Regulations, theOffer Document of the Scheme, the investment objectives of eachScheme and the IMA. Further the AMC shall exercise due diligenceand care in managing and / or taking all its investment decisions withrespect to the funds mobilised under various Schemes as would beexercised by other persons engaged in the same business.

u Take all reasonable steps and exercise due diligence to ensure that theinvestment of funds pertaining to any scheme is not contrary to theprovisions of the SEBI Regulations and the Trust Deed

u Provide or cause to be provided to the Trustee, reports on itsperformance of duties, as the Trustee may reasonably require, fromtime to time.

u Ensure that adequate instructions are issued to and duly complied withby the custodian, stock brokers, agents (including registrars and sharetransfer agents) for discharging its duties under the SEBI Regulationsand / or the IMA.

u Provide information to SEBI and the Unitholders as required under theSEBI Regulations or as otherwise required by SEBI.

u Submit quarterly reports on March 31, June 30, September 30 andDecember 31 on the functioning of the Schemes of the Mutual Fund

12



to the Trustee or at such intervals as may be required by the Trustee orSEBI.

u Maintain arms’ length relationship with other companies, or institutionsor financial intermediaries or any body corporate with which it may beassociated.

u Not appoint any person as key personnel who has been found guilty ofany economic offence or involved in violation of securities laws.

u Be responsible for the acts of commissions or omissions by itsemployees or the persons whose services have been procured by theAMC.

u While utilising any services of or entering into any type of transactionswith the Sponsor or any of the Sponsor’s and / or the AMC’s associates,employees or their relatives, ensure that the same are permitted underthe SEBI Regulations or by SEBI. If utilisation of such services orentering into such transactions are permitted, then the AMC shallensure that the same are carried out in accordance with the mannerprovided under the SEBI Regulations or by SEBI and shall report onthe same to the Trustee and / or SEBI where necessary or requiredunder the SEBI Regulations.

u Ensure that it does not give any undue or unfair advantage to anyassociates or deals with any of the associates of the AMC in any mannerdetrimental to the interest of the Unitholders.

u Notwithstanding anything contained in any contract or agreement ortermination, the AMC or its Directors or other officers shall not beabsolved of liability to the Mutual Fund for their acts of commission oromissions, while holding such position or office.

u Keep or cause to be kept on behalf of the Mutual Fund at the AMC’shead office, and at such other places as may be required under anylaw or by the Trustee, such books, records and statements expressedin such currencies as may be necessary to give a proper and complete

record of all transactions carried out by the AMC for or on behalf of theMutual Fund and such other books, records and statements as maybe required by any law or the Trustee and shall permit the employees,authorised agents and auditors of the Trustee, to inspect such books,records, and statements at all reasonable times and on request of theTrustee, furnish true copies thereof.

u Not take up any activity that is in contravention of the SEBI Regulations.

u Not acquire any of the assets out of the scheme property which involvesthe assumption of any liability which is unlimited or which may resultin encumbrance of the scheme property in any way.

u Abide by the Code of Conduct as specified in the Fifth Schedule to theSEBI Regulations.

u At all time act in the best interest of the Mutual Fund.

u The AMC shall -

u not act as a Trustee of any mutual fund;

u not undertake any other business activities except activities inthe nature of portfolio management services, management andadvisory services to offshore funds, pension funds, providentfunds, venture capital funds, management of insurance funds,financial consultancy and exchange of research on commercialbasis if any of such activities are not in conflict with the activitiesof the Mutual Fund.

Provided that the AMC may itself or through its subsidiariesundertake such activities if it satisfies SEBI that the key personnelof the AMC, the systems, back office, bank and securitiesaccounts are segregated activity wise and there exist systems toprohibit access to inside information of various activities.

Provided further that the AMC shall meet capital adequacyrequirements, if any, separately for each such activity and obtainseparate approval, if necessary under the relevant regulations.

DIRECTORS OF THE AMC

The Board of Directors of the ABN AMRO Asset Management (India) Limited comprises of the following eminent persons :

Mr. Romesh Sobti* Other Directorships

119, Samudra Mahal, Dr. Annie Besant Road, u ABN AMRO Securities (India) Private Limited, DirectorWorli, Mumbai 400 018 u ABN AMRO Asia Equities (India) Limited, Director

u ABN AMRO Central Enterprise Services Private Limited, ChairmanExecutive Vice President & Country Representative - Indiaand Head Strategic Value Businesses Asia & Middle-East,ABN AMRO Bank N.V.

Mr. Franciscus KUSSE* Other Directorships

Hoogoorddreff, 66-681101 BE u ABN AMRO Asset Management (Asia) Limited, DirectorAmsterdam u ABN AMRO Asset Management (Australia) Limited, Director

u PT ABN AMRO Manajemen Investasi, CommissionerGlobal Head of Retail, u ABN AMRO Asset Management (Japan) Limited, DirectorABN AMRO Asset Management, Amsterdam u ABN AMRO Asset Management (Singapore) Limited, Director

u ABN AMRO Asset Management (Taiwan) Limited, Directoru ABN AMRO Investment Funds Asia, Directoru The Formosa Growth Fund Limited, Director

Mr. Arne LINDMAN* Other Directorships

37/F, Cheung Kong Centre Nil2 Queen's Road Central, Hong Kong

Chief Executive Officer, Asia Pacific

Mr. Rajan Ray Other Directorships

LCG 104B, The Laburnum, Sushant Lok, u Tricone Projects India Private Limited, DirectorSector 28, Gurgaon (Haryana) 122 002 u Checkmode Solutions Limited, Director

Retired Regional Head India, Corporate & Institutional Bank,Standard Chartered Bank, Mumbai, India

Mr. Arun Nanda Other Directorships

3, St. Helen's Court, G. Deshmukh Marg, u Mahindra & Mahindra Limited, Executive DirectorMumbai 400 026 u Mahindra Construction Company Limited, Chairman

u PSL Erickson Limited, ChairmanExecutive Director, Mahindra & Mahindra Limited u Mahindra Holidays & Resorts (India) Limited, Chairman

u Mahindra Intertrade Limited, Directoru Mahindra Acres Consulting Engineers Limited, Chairmanu Mahindra Holdings & Finance Limited, Directoru Mahindra World City Developers Limited, Directoru Owens Corning (India) Limited, Directoru Mahindra GESCO Developers Limited, Vice Chairmanu Mahindra Infrastructure Developers Limited, Chairmanu Mahindra (China) Tractor Company Limited, Director

13


u Mahindra World City (Jaipur) Limited, Directoru Indo - French Chamber of Commerce & Industry, President·u The Council of EU Chamber of Commerce in India,

Member of Governing Board

Mr. Ninad Karpe Other Directorships

801, Jaywant Apartments, 63 Tardeo Road, Mumbai 400 034 u CA Computer Associates India Private Limited, Managing Directoru Savita Chemicals Limited, Director

Managing Director, India & SAARC Computer Associates u CA Satyam ASP Private Limited, Director

* Associate Directors i.e. Directors associated with the Sponsor.

Mr. Nikhil Johri, Executive Director, has been seconded by ABN AMRO Bank N.V. to the AMC to look after the AMC's overall business strategy. He in thisrole is responsible for providing guidance to the business and to assist the AMC in implementing ABN AMRO's global best practices in the Indian environment.Mr. Johri is not a member of the Board of the AMC.

KEY PERSONNEL OF THE AMC AND RELEVANT EXPERIENCE

Name, Age & Designation Educational Qualification Previous Experience Period

Mr. Rakesh Vengayil u B.Sc. u Vice President, Head of Business Management December 2001 - September 2004Head - Asset Management u Post Graduate Diploma in – South Asia, Custody & Clearing AdvisoryOperations Systems Management – ABN AMRO Bank N.V., Mumbai, IndiaAge : 34 years u Asst. Vice President, Head of Operations, April 1998 - November 2001

Custody & Fund Accounting - ABN AMROBank N.V., Mumbai, India

u Analyst, Settlements Operations – October 1996 - March 1998Morgan Stanley Trust Company, Mumbai, India

u Head - Corporate Action - HDFC Bank Ltd., January 1995 - October 1996Mumbai, India

u Executive - Settlements - Southern India August 1994 - December 1994Depository India (Pvt.) Ltd., Mumbai, India

Mr. Mihir M. Vora u Post Graduate Diploma in u Fund Manager with Prudential ICICI Asset November 2000 - January 2004Head - Equities Management from Indian Management Co. LimitedAge : 36 years Institute of Management, u Fund Manager & Dealer of SBI Funds May 1994 to November 2000

Lucknow Management Limitedu B.E. (Mechanical)

Mr. Mahendra Jajoo u ACA from Institute of u Head - Primary Dealership - ABN AMRO March 1999 to December 2004Head - Fixed Income Chartered Accountants Securities (India) Pvt. Ltd.Age : 37 years of India u Assistant Vice-President - ICICI Bank Ltd. December 1997 to February 1999

u Completed Level III of CFA u Senior Manager - Peregrine Fixed Income Ltd. March 1997 to November 1997programme with CFA Institute u Manager - Lodha Capital Markets Ltd. January 1995 to February 1997(Formerly AIMR) of U.S.A. u Manager - ICICI Securities Ltd. February 1994 to December 1994

u ACS from Institute ofCompany Secretaries of India

Mr. R. Sivakumar u Post Graduate Diploma in u Fund Manager - Sundaram Asset Management January 2001 - March 2004Fund Manager – Management from Indian Company LimitedFixed Income Institute of Management, u Research Analyst - Zurich Asset Management December 1999 - December 2000Age : 30 years Ahmedabad Company (India) Private Limited

u B. Tech. (IIT Madras) u Investment Analyst - ITC Threadneedle Asset June 1998 - December 1999Management Company Limited

Mr. Prateek Agrawal u B.E. u Vice President & Group Head (Research) – May 1994 - April 2004Fund Manager - Equities u PGDM SBI Capital Markets LimitedAge : 34 years

Mr. Alok Singh u PGDBA u Manager - Fixed Income, UTI Bank August 2000 - January 2005Manager - Fixed Income u CFAAge : 29 years

Mr. Rajeev Dalal u MBA - Finance, u Product Manager - JM Morgan Stanley April 2004 to April 2005Head Research Bentley College USA Retail Pvt. Ltd.Age : 31 years u CFA Charter Holder, u Manager - Research & Business February 2003 to February 2004

CFA Institute, USA Development - Birla Sun Lifeu Mutual Fund Analyst / Business Analyst 1998 to 2002

Performance Attribution - Worked in the USwith companies such as State Street Bank,Rydex Global Advisors and WachoviaCorporation

Mrs. Rupali Shah u B.Com. u Equity Dealer - IL&FS Asset September 2003 - April 2004Dealer - Equities Management Co. Ltd.Age : 33 years u Equity Dealer - GIC Asset Management Co. Ltd. November 1995 - September 2003

Mr. Rana Vikram u Master of Management u Head Personal Banking Segment, January 2004 - July 2005Head - Distribution Studies, Consumer Banking, India, ABN AMRO Bank,& Marketing Specialisation : New DelhiAge : 39 years Marketing - JBIMS, u Regional Head Consumer Banking, August 2000 - December 2003

Mumbai University Eastern Region and Chief Manager, East,ABN AMRO Bank, Kolkata

u Head, Financial Control and Business Metrics November 1999 - July 2000Consumer Banking, India, ABN AMRO Bank,Delhi

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u Head Consumer Banking, Chennai, February 1999 - October 1999ABN AMRO Bank, Chennai

u Manager, Strategic Projects, Personal Banking, September 1997 - January 1999ANZ Grindlays Bank, Chennai

u Branch Manager, Bandra Branch November 1994 - August 1997(Sept. '96-Aug. '97) and Branch Manager,Vile Parle Branch (Nov. '94-Aug. '96),ANZ Grindlays Bank, Mumbai

Mr. K. M. Suneej u ACA from Institute of u Assistant Vice President - (Operations) – January 2003 to November 2003Head - Fund Accounting Chartered Accountants SBI Funds Management (P) Ltd.& Settlement of India u Manager - Fund Accounting, Alliance Capital June 2000 to December 2002Age : 32 years u Grad CWA Asset Management (I) Pvt. Ltd.

u Executive, IDBI Investment Management March 1999 to May 2000Company Ltd.

Mrs. Abhaya Joglekar u B.Com. u A.V.P. Compliance & Asst. Company Secretary April 2000 till August 11, 2005Head - Compliance & u ACS from Institute of – Prudential ICICI Asset ManagementRisk Management Company Secretaries of India Company Ltd.Age: 36 years u Bachelor of Law (LL.B.) u Company Secretary - IL&FS Asset Management April 1999 to April 2000

Company Limitedu Manager- Secretarial & Compliance - November 1998 to March 1999

Infrastructure Leasing & Financial Services Ltd.u Assistant Company Secretary - Stock Holding January 1995 to October 1998

Corporation of India Limited

Mr. Mitesh Haria u ACS from Institute of u Compliance Department : HSBC Asset January 2002 to November 2002Company Secretary Company Secretaries of India Management (India) Private LimitedAge : 30 years u Masters in Business Laws u Secretarial Department - HSBC Securities October 2000 to January 2002

from National Law School and Capital Markets (India) Private Limitedof India University

u Bachelor of Law (LL.B.)u Master of Law (LL.M.) -

1st Year (Subject -

International Law)

* Mr. Rajeev Dalal will perform the role of Research Analyst for Equities w.e.f. January 20, 2006.

Presently the AMC has one dedicated equity research analyst and a total of seven employees in the investment management department.

Presently all the key personnel are based at the registered office of the AMC.

Name, Age & Designation Educational Qualification Previous Experience Period

FUND MANAGER

The Fund Manager for the Scheme is Mr. Mihir Vora. For experience andqualification of the Fund Manager, please see the table of Key Personnelabove.

INVESTOR RELATIONS OFFICER

Mr. K. M. Suneej, Head – Fund Accounting & Settlements

ABN AMRO Asset Management (India) Limited


Nariman Point, Mumbai 400 021

STATUTORY AUDITORS FOR THE MUTUAL FUND

M/s. S. R. Batliboi & Co.

6th Floor, Express Tower,

Nariman Point,

Mumbai 400 021

CUSTODIAN

Deutsche Bank A G, has been appointed as Custodian for the Scheme.The Custodian has been registered with SEBI under registration no.: IN/CUS/03. The Trustee and the AMC have entered into a Custodian Agreementwith the Custodian and the salient features of the said Agreement includeobligations of the Custodian to :

(a) Provide post-trading and custodial services to the Mutual Fund.

(b) Collect and receive any income and other payments and distributionmade by the issuer of securities.

(c) Provide detailed management information and other reports as requiredby the AMC.

(d) Maintain confidentiality of the transactions.

(e) Be responsible for the loss or damage to the assets belonging to theScheme due to negligence on its part or on the part of its approvedagents.

(f) Segregate assets of each Scheme.

(g) The Custodian shall not assign, transfer or lend the property held by iton behalf of the Mutual Fund except with the prior written permissionof the AMC.

The Custodian will be entitled to remuneration for its services in accordancewith the terms of the Custodian Agreement. The Trustee has the right tochange the Custodian.

REGISTRAR AND TRANSFER AGENT

Computer Age Management Services (P) Limited, A & B, Lakshmi Bhawan,609, Anna Salai, Chennai 600 006 (CAMS) has been appointed as Registrarand Transfer Agent for the Scheme. The Registrar and Transfer Agent isregistered with SEBI under registration number INR000002813. As Registrarand Transfer Agent to the Scheme, CAMS will handle all back officetransaction processing activities. The AMC and the Trustee have satisfiedthemselves that the Registrar and Transfer Agent has adequate capacity todischarge responsibilities with regard to processing of applications anddespatching Unit certificates to Unitholders within the time limit prescribedin the SEBI Regulations and also has sufficient capacity to handle investorcomplaints.

The Registrar and Transfer Agent will be entitled to remuneration for itsservices in accordance with the terms of the Registrar and Transfer AgentAgreement(s).

FUND ACCOUNTANT

Deutsche Bank A G, Mumbai has been appointed as the Fund Accountantfor the Scheme. The Fund Accountant provides fund accounting, NAVcalculation and other related services. The Fund Accountant is entitled toremuneration for its services in accordance with the terms of the FundAccounting Agreement. The AMC have the right to change the FundAccountant, if necessary. The Fund Accountant is also presently acting asthe Custodian to the Scheme of the Mutual Fund.

COLLECTING BANKERS

The Collecting Banker to the New Fund Offer is ABN AMRO Bank N.V(SEBI Registration No. INBI00000034)

Application for the New Fund Offer / Continuous Offer will be accepted atthe Collection centres / ISCs as may be designated by the AMC from timeto time. The AMC may from time to time appoint such other banks registeredwith SEBI as collecting bankers.

15


INVESTMENT OBJECTIVE & POLICY

TYPE OF SCHEME

ABN AMRO Future Leaders Fund is an Open-Ended Equity Scheme withno assured returns The Scheme offers Regular Plan. Regular Plan under theScheme offers Growth Option and Dividend Option. The Dividend Optionoffers Dividend Payout and Dividend Re-investment facilities.

INVESTMENT OBJECTIVE

Investment objective of the Scheme is to seek to generate long-term capitalappreciation by investing primarily in companies with high growthopportunities in the middle and small capitalization segment, defined as‘Future Leaders’. The fund will emphasize on companies that appear tooffer opportunities for long-term growth and will be inclined towardscompanies that are driven by dynamic style of management andentrepreneurial flair.

However, there can be no assurance that the investment objectives of theScheme and Plan launched there under will be realized. The Scheme / Planslaunched there under does not guarantee/indicate any returns.

INVESTMENT PATTERN

The corpus of the Scheme will be primarily invested in middle and smallcapitalization equity and equity related securities. The Scheme may alsoinvest its corpus in equities that are not middle and small capitalization stocksas defined above, and debt or money market instruments, to manage itsliquidity requirements.

Subject to SEBI Regulations and other prevailing laws as applicable, thecorpus of the Scheme can be invested in any (but not exclusively) of thefollowing securities:

u Equity and equity related securities including convertible bonds anddebentures and warrants carrying the right to obtain equity shares.

u ADRs / GDRs issued by the Indian companies, foreign securities,subject to the guidelines issued by the Reserve Bank of India andSecurities and Exchange Board of India.

u Stock, index and fixed income derivative instruments as permitted bySEBI

u Any other instruments which can be categorised as Equity RelatedInstruments.

Under normal circumstances, the asset allocation under the Scheme wouldbe as follows:

Instruments Min- Max (%) Risk Profile

Equity and Equity related 65 - 100%# Medium to Highsecurities of companiescategorised as Future Leaders

Equity and Equity related 0 - 35%# Medium to Highsecurities of Companies otherthan Future Leaders,

* Debt Instruments & Money 0 - 35%# Low to MediumMarket instruments(including money and call)

# Maximum Exposure to derivatives under the Scheme will be uptopermissible regulatory limits as laid down in SEBI circular NumberDNPD/Cir-29/2005 dated September 14, 2005

* Debt instruments may include securitised debt upto 20% of the netassets

Investments in ADRs / GDRs issued by the Indian companies, foreignsecurities would be upto 5% of the net assets of this scheme.

The AMC may review the above investment pattern based on its views onthe equity markets and liquidity or liability needs. Investors may note thatsecurities, which offer higher potential return, will usually display highervolatility. Thus the investment portfolio of the Scheme would reflectmoderate to high volatility in its equity and equity related investments andlow to moderate volatility in its debt and money market investments.

Pending deployment of funds of the Scheme in securities in terms of theinvestment objective of the Scheme, the AMC may invest the funds of theScheme in short term deposits of scheduled commercial banks.

The AMC retains the option to alter the asset allocation depending on liquidityconsiderations or on account of high levels of subscriptions or redemptionsrelative to the fund size, or upon considerations that optimise returns of theScheme through investment opportunities or upon various defensiveconsiderations including market conditions, market opportunities, applicableregulations and political and economic factors.

The percentage of the scheme’s corpus invested in equities and equityrelated securities identified as Future Leaders, may decrease subject to aminimum of 65% and in the event of the same falling below 65%, a reviewand portfolio rebalancing will be carried out within a reasonable time periodby the AMC. In addition, as part of the investment process, the InvestmentCommittee of the AMC will conduct a periodic review of the asset allocationand may suggest rebalancing of the portfolio.

Pending deployment of funds of the Scheme in securities in terms ofinvestment objective of the Scheme, the Mutual Fund may invest the fundsof the Scheme in short term deposits of scheduled commercial banks.

INVESTMENT STRATEGY

Under normal circumstances, the scheme shall invest at least 65% of thenet assets in equity and equity related securities of those middle and smallercapitalization companies defined as “Future Leaders”. Future Leaders arecompanies which have a market capitalization below that of the 99th stockin the BSE500 Index (i.e. excluding the top 20% of the index by marketcapitalization rankings) and which may or may not be a constituent of theBSE 500 Index, at the time of investment. The universe may also includeInitial Public Offerings whose market capitalization would be as per the above-mentioned criteria. The remaining portion would be invested in equity andequity related instruments of any companies that have a market capitalizationequal to or above the 99th stock in BSE 500 Index and may or may not be aconstituent of the BSE 500 index.

CHANGE IN INVESTMENT PATTERN

Subject to the SEBI Regulations, the asset allocation pattern indicated abovemay change from time to time, depending on liquidity considerations or onaccount of high levels of repurchase or redemptions relative to fund size, orupon considerations that optimise returns of the Scheme through investmentopportunities or upon various defensive considerations including marketconditions, market opportunities, applicable regulations and political andeconomic factors. It must be clearly understood that the percentages statedabove are only indicative and not absolute. These proportions may varysubstantially depending upon the perception of the AMC, the intention beingat all times to seek to protect the interests of the Unitholders. Such changesin the investment pattern will be for short term and only for defensiveconsiderations.

TERMS OF THE REGULAR PLAN UNDER THE SCHEME

(a) Liquidity

The Scheme will offer for Sale and Redemption the Units on everyBusiness Day on an ongoing basis, commencing not later than 30 daysfrom the closure of New Fund Offer Period.

(i) Redemption of Units

Accordingly, the Units can be redeemed (i.e. sold back to theMutual Fund) on or Switched out (i.e. to another scheme of the

Mutual Fund or Option(s) offered within the Scheme, if any) every

Business Day, at the Applicable NAV subject to applicable Load,

if any.

In case an investor has purchased Units on more than one

Business Day (either under the New Fund Offer Period or through

subsequent purchases) the Units purchased first (i.e. those Units

which have been held for the longest period of time), will be

deemed to have been redeemed first i.e. on a First-in-First-Out

basis.

It may, however, be noted that in the event of death of the

Unitholder, the nominee/legal heir (as the case may be), subject

to production of requisite documentary evidence, will be able to

redeem the investment.

(ii) Redemption Price

The Redemption / Switch out will be at NAV based prices subjectto an Load, if any. Please refer to “Redemption Price” on page 29and “Load structure” on page 31.

(iii) Payment of Redemption Proceeds

As per the SEBI Regulations, the Mutual Fund shall despatchRedemption proceeds within 10 Business Days from the date ofacceptance of the Redemption request. However, under normalcircumstances, the Mutual Fund will endeavor to despatch theRedemption proceeds within 3 Business Days from the date ofacceptance of the Redemption request.

Please refer to “Right to Limit / Withhold Redemptions” onpage 30 and “Suspension of Sale / Redemption / SwitchingOption(s) of the Units” on page 30.

SECTION II

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(b) Listing

Being Open-Ended Scheme under which Sale and Redemption of Unitswill be made on continuous basis by the Mutual Fund, the Units of theScheme are not proposed to be listed on any stock exchange. However,the AMC / Trustee may at their sole discretion list the Units under anyof the Scheme on one or more stock exchanges at a later date.

(c) Fees and Expenses

(i) Initial Issue Expenses

The Mutual Fund may charge initial issue expenses upto amaximum of 6.00% of the initial resources raised under theScheme. Initial Issue expenses upto 4.00% of the initial resourcesraised will be charged to the Scheme upfront and the balanceInitial Issue expenses up to 2.00% of the initial resources raisedwill be amortized over a period not exceeding one year. The initialissue expenses in excess of the above limits shall be borne bythe AMC / Sponsor / Trustee. The AMC may decrease / withdrawthe amortisation of the initial issue expenses at any point of time.

The details of the initial issue expenses of the Scheme has beenstated under section titled “Initial Issue Expenses” on page 31.

(ii) Annual Scheme Recurring Expenses

The details of recurring expenses of the Scheme, on an annualbasis, have been stated under section titled “Annual SchemeRecurring Expenses” on page 32.

As per the SEBI Regulations, the maximum recurring expensesincluding the investment management and advisory fee that canbe charged to the Scheme shall be subject to a percentage limitof average daily net assets as in the table below:

First Rs. 100 Next Rs. 300 Next Rs. 300 Over Rs. 700Crores Crores Crores Crores

2.50% 2.25% 2.00% 1.75%

Subject to the SEBI Regulations and this Offer Document,expenses over and above the prescribed ceiling shall be borne bythe AMC.

(iii) Load

The Mutual Fund shall ensure that the Redemption Price is notlower than 93% of the NAV and the Sale Price is not higher than107% of the NAV, provided that the difference between theRedemption Price and Sale Price of the Unit shall not exceed thepermissible limit of 7% of the Sale Price, as provided for underthe SEBI Regulations.

For Units purchased during the New Fund Offer Period and afterthe closure of the New Fund Offer Period, please refer to thesection titled “Load Structure & Recurring Expenses” on page 31for further details. The Trustee / AMC has a right to impose ormodify the Load structure with prospective effect and to introducean Entry and / or Exit Load and / or any other Load or a combinationthereof, subject to the maximum limits as prescribed under theSEBI Regulations.

CHANGES IN FUNDAMENTAL ATTRIBUTES

Subject to Regulation 18(15A), the Trustee shall ensure that no change inthe fundamental attributes of the Scheme or the trust or fees and expensespayable or any other change which would modify the Scheme and affectthe interest of Unitholders, shall be carried out unless:

u a written communication about the proposed change is sent to eachUnitholder and an advertisement is given in one English daily newspaperhaving nation-wide circulation as well as in a newspaper published inthe language of the region where the Head Office of the Mutual Fundis situated; and

u the Unitholders are given an option to exit at the prevailing Net AssetValue without any Exit Load.

Explanation: In terms of the SEBI Regulations and circular dated February4, 1998, “Fundamental Attributes” referred above shall mean:

i) Type of Scheme

u Open ended

u Equity Fund.

ii) Investment Objectives

u Main Objectives – Growth

u Investment pattern – As stated earlier, tentative asset allocationequity/debt/money market instruments with minimum andmaximum asset allocation, while retaining the option to alter the

asset allocation for a short term period on defensiveconsiderations.

iii) Terms of Issue

u As stated earlier, liquidity provisions such as listing, repurchase,redemption

u As stated earlier, aggregate fees and expenses charged to theScheme

BENCHMARK INDEX

The Benchmark Index for the Scheme is CNX MIDCAP Index

Performance comparisons for the Scheme will be made vis-à-vis therespective Benchmark. However, the Scheme’s performance may not bestrictly comparable with the performance of the respective Benchmarksdue to the inherent differences in the construction of the portfolios. TheTrustee / AMC reserves the right to change the Benchmarks for evaluationof performance of the Scheme from time to time in conformity with theinvestment objectives and appropriateness of the Benchmarks subject tothe SEBI Regulations, and other prevailing guidelines, if any.

INVESTMENT APPROACH & RISK CONTROL

Investment Approach

The investment process will follow a fundamental-driven investmentphilosophy, with adequate importance to valuation and qualitative factors.A top-down approach will be used to identify sectors and companies withinthose sectors that will form the core portfolio. A portion of the portfolio willalso constitute specific investment ideas that offer good fundamental valueusing a bottom-up approach. All companies selected will be analyzed takinginto account the business fundamentals, the company’s financial strength,industry structure, management quality and earnings sensitivity to economicfactors.

Risk mitigation of stock specific risk will be done by investing in companiesonly after adequate research and with the approval of the InvestmentCommittee of the Asset Management Company. Risk will also be reducedthrough adequate portfolio diversification across multiple sectors / industries.

As per the asset allocation pattern indicated, for investment in debt securitiesand money market instruments, the Fund may invest a part of the portfolioin various debt securities / instruments issued by corporates and/or stateand central government. Government securities may include securities whichare supported by the ability to borrow from the treasury or supported onlyby the sovereign guarantee or of the state government or supported byGOI / state government in some other way. Investment in debt instrumentsshall generally have a low risk profile and those in money market instrumentsshall have an even lower risk profile. The maturity profile of debt instrumentswill be selected in accordance with the AMC’s view regarding current marketconditions, interest rate outlook and the stability of ratings.

Investment in debt securities will usually be in instruments that have beenassessed as “high investment grade” by at least one credit rating agencyauthorised to carry out such activity under the applicable regulations. TheScheme may also invest in unlisted and / or privately placed and / or unrateddebt securities subject to the limits indicated under “Investment Restrictionsfor the Scheme” on page 19 of this Offer Document, from issuers of reputeand sound financial standing. All the investments in unrated debt securitiesshall be made with the prior approval of Trustee and Board of the AMC or aCommittee constituted / authorised in this behalf.

Debt instruments (in the form of non-convertible debentures, bonds, securedpremium notes, zero interest bonds, deep discount bonds, floating rate bond /notes, securitised debt, pass through certificates, asset backed securities,mortgage backed securities and any other domestic fixed income securitiesincluding structured obligations etc.) include, but are not limited to:

u Debt obligations of the Government of India, State and localGovernments, Government Agencies and statutory bodies (which mayor may not carry a State / Central Government guarantee),

u Securities that have been guaranteed by Government of India and StateGovernments,

u Securities issued by Corporate Entities (Public / Private sectorundertakings),

u Securities issued by Public / Private sector banks and developmentfinancial institutions.

Money market instruments include

u Commercial papers

u Commercial bills

u Treasury bills

u Government securities having an unexpired maturity, upto one year

u Call or notice money

u Repo / Reverse Repo agreements

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u Certificate of deposit

u Usance bills

u Permitted securities under a repo / reverse repo agreement

u Any other like instruments as may be permitted by SEBI / such otherregulatory authority from time to time

The securities mentioned above and such other securities that the Schemeare permitted to invest in, could be listed / unlisted, privately placed, secured /unsecured, rated / unrated of any maturity. The securities may be acquiredthrough Initial Public Offerings (IPOs), other public offers, secondary marketoperations, private placements, rights offers (including renunciation) ornegotiated deals.

Pursuant to the SEBI Regulations, the Scheme shall not make any investmentin:

u Any unlisted security of an associate or group company of the Sponsor;or

u Any security issued by way of private placement by an associate orgroup company of the Sponsor; or

The listed securities of group companies of the Sponsor which is in excessof 25% of the net assets.

Investments in the Scheme of Mutual Funds

The Scheme may invest in another scheme managed by the AMC or in theschemes of any other mutual funds, provided it is in conformity with theinvestment objectives of the Scheme and in terms of the prevailing theSEBI Regulations. As per the SEBI Regulations, no investment managementfees will be charged for such investments and the aggregate inter schemeinvestment made by all schemes in the schemes of the Mutual Fund or inthe schemes under the management of any other asset managementcompany shall not exceed 5% of the net asset value of the Mutual Fund.

Overseas Financial Markets

The Scheme may also invest in suitable investment avenues in overseasfinancial markets for the purpose of diversification, commensurate with theScheme objectives and subject to necessary stipulations by SEBI. Towardsthis end, the Mutual Fund may also appoint overseas investment advisorsand other service providers.

TRADING IN DERIVATIVES

The Scheme may also use various derivative and hedging products fromtime to time, as would be available and permitted by SEBI, in an attempt toprotect the value of the portfolio and enhance Unitholders’ interest.

SEBI vide its circular no. SEBI/MFD/CIR No. 03/ 158 /03 dated June 10,2003, No. DNPD/Cir-29/2005 dated September 14, 2005 and No. DNPD/CIR-30/2006 dated January 20, 2006 has permitted all mutual funds toparticipate in derivatives trading subject to observance of guidelines issuedby SEBI in this behalf. Pursuant to this, mutual funds may use variousderivative and hedging products from time to time, as would be availableand permitted by SEBI, in an attempt to protect the value of the portfolioand enhance Unitholders’ interest. Accordingly, the Scheme may usederivative instruments interest rate swaps, forward rate agreements or suchother derivative instruments as may be introduced from time to time aspermitted under the SEBI Regulations and guidelines.

The Scheme shall, under normal circumstances, can have exposure upto topermissible regulatory limits as laid down in SEBI circular no. DNPD/Cir-29/2005 dated September 14, 2005, No. DNPD/CIR-30/2006 dated January20, 2006 and circular no. SEBI/MFD/CIR No. 03/ 158 /03 dated June 10,2003.

The following information provides a basic idea as to the nature of thederivative instruments proposed to be used by the Fund and the benefitsand risks attached therewith.

Interest Rate Swaps (IRS) and Forward Rate Agreements (FRA)

Benefits

Bond markets in India are not very liquid. Investors run the risk of illiquidityin such markets. Investing for short-term periods for liquidity purposes hasits own risks. Investors can benefit if the Fund remains in call market for theliquidity and at the same time take advantage of fixed rate by entering intoa swap. It adds certainty to the returns without sacrificing liquidity.

IRS

All swaps are financial contracts, which involve exchange (swap) of a set ofpayments owned by one party for another set of payments owned by anotherparty, usually through an intermediary (market maker). An IRS can be definedas a contract between two parties (Counter Parties) to exchange, on particulardates in the future, one series of cash flows, (fixed interest) for anotherseries of cashflows (variable or floating interest) in the same currency andon the same principal for an agreed period of time. The exchange ofcashflows need not occur on the same date.

FRA

A FRA is an agreement between two counter parties to pay or to receivethe difference between an agreed fixed rate (the FRA rate) and the interestrate prevailing on a stipulated future date, based on a notional amount, foran agreed period. In short, in a FRA, interest rate is fixed now for a futureperiod. The special feature of FRAs is that the only payment is the differencebetween the FRA rate and the Reference rate and hence are singlesettlement contracts. As in the case of IRS, notional amounts are notexchanged.

The Scheme will use derivative instruments for the purpose of hedging andportfolio balancing. Hedging does not mean maximisation of returns butonly reduction of systematic or market risk inherent in the investment.

Illustrations

Basic Structure of a Swap

Assume that the Scheme has a Rs. 20 crore floating rate investment linkedto MIBOR (Mumbai Inter Bank Offered Rate). Hence, the Scheme is currentlyrunning an interest rate risk and stands to lose if the interest rate movesdown. To hedge this interest rate risk, the Scheme can enter into a 6 monthMIBOR swap. Through this swap, the Scheme will receive a fixedpredetermined rate (assume 12%) and pays the “benchmark rate” (MIBOR),which is fixed by the National Stock Exchange of India Limited (NSE) or anyother agency such as Reuters. This swap would effectively lock-in the rateof 12% for the next 6 months, eliminating the daily interest rate risk. Thisusually is routed through an intermediary who runs a book and matchesdeals between various counterparties.

The steps will be as follows -

u Assuming the swap is for Rs. 20 crore June 1, 2003 to December 1,2003. The Scheme is a fixed rate receiver at 12% and the counterpartyis a floating rate receiver at the overnight rate on a compounded basis(say NSE MIBOR).

u On June 1, 2003 the Scheme and the counterparty will exchange onlya contract of having entered this swap. This documentation would beas per International Swap Dealers Association (ISDA).

u On a daily basis, the benchmark rate fixed by NSE will be tracked bythem.

u On December 1, 2003 they will calculate the following -

u The Scheme is entitled to receive interest on Rs. 20 crore at 12%for 184 days i.e. Rs.1.21 crore, (this amount is known at the timethe swap was concluded) and will pay the compoundedbenchmark rate.

u The counterparty is entitled to receive daily compounded call ratefor 184 days and pay 12% fixed.

u On December 1, 2003, if the total interest on the daily overnightcompounded benchmark rate is higher than Rs. 1.21 crore, theScheme will pay the difference to the counterparty. If the dailycompounded benchmark rate is lower, then the counterparty willpay the Scheme the difference.

u Effectively the Scheme earns interest at the rate of 12% p.a. forsix months without lending money for 6 months fixed, while thecounterparty pays interest @ 12% p.a. for 6 months on Rs. 20crore, without borrowing for 6 months fixed.

The above example illustrates the benefits and risks of using derivatives forhedging and optimizing the investment portfolio. Swaps have their owndrawbacks like credit risk, settlement risk. However, these risks aresubstantially reduced as the amount involved is interest streams and notprincipal.

The following information provides a basic idea as to the nature of thederivative instruments proposed to be used by the Fund and the benefitsand risks attached therewith. Please note that the examples have beengiven for illustration purposes only.

Index Futures

Benefits

Investment in stock index futures can give exposure to the index withoutdirectly buying the individual stocks. Appreciation in index stocks can beeffectively captured through investment in Stock Index Futures. The Fundcan sell futures to hedge against market movements effectively withoutactually selling the stocks it holds. The stock index futures are instrumentsdesigned to give exposure to the equity market indices. The Stock Exchange,Mumbai and the National Stock Exchange have started trading in indexfutures of 1, 2 and 3-month maturities. The pricing of an index future is thefunction of the underlying index and interest rates.

Illustration

Spot Index: 1790

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1 month Nifty Future Price on day 1: 1800. Fund buys 100 lots. Each lot hasa nominal value equivalent to 200 Units of the underlying index.

Situation 1:

Let us say that on the date of settlement, the future price = closing spotprice = 1810

Profits for the Fund = (1810 –1800)* 100 lots * 200 = Rs 200,000

Situation 2

Let us say that on the date of settlement, the future price = Closing spotprice = 1795

Loss for the Fund = (1795-1800)* 100 lots * 200 = (Rs 100,000)

The net impact for the Fund will be in terms of the difference between theclosing price of the index and cost price (ignoring margins for the sake ofsimplicity). Thus, it is clear from the example that the profit or loss for theFund will be the difference of the closing price (which can be higher orlower than the purchase price) and the purchase price. The risks associatedwith index futures are similar to the one with equity investments. Additionalrisks could be on account of illiquidity and hence mispricing of the future atthe time of purchase.

Buying Options

Benefits of buying a Call Option

Buying a call option on a stock or index gives the owner the right, but notthe obligation, to buy the underlying stock / index at the designated strikeprice. Here the downside risks are limited to the premium paid to purchasethe option.

Illustration

If the Fund buys a 1 month call option on Reliance at a strike price of Rs.500, the current market price being say Rs.505. The Fund will have to pay apremium of say Rs. 25 to buy this call. If the stock price goes below Rs. 500during the tenure of the call, the Fund avoids the loss it would have incurredhad it straightaway bought the stock instead of the call option. The Fundgives up the premium of Rs. 25 that has to be paid in order to protect theFund from this probable downside. If the stock goes above Rs. 500, it canexercise its right and own Reliance at a cost price of Rs. 500, therebyparticipating in the upside of the stock.

Benefits of buying a Put Option

Buying a put option on a stock originally held by the buyer gives him / herright, but not the obligation, to sell the underlying stock at the designatedstrike price. Here the downside risks are limited to the premium paid topurchase the option.

Illustration

If the Fund owns Reliance and also buys a three-month put option on Relianceat a strike of Rs. 500, the current market price being say Rs.505. The Fundwill have to pay a premium of say Rs. 35 to buy this put. If the stock pricegoes below Rs. 500 during the tenure of the put, the Fund can still exercisethe put and sell the stock at Rs. 500, avoiding therefore any downside onthe stock below Rs. 500. The Fund gives up the fixed premium of Rs. 35that has to be paid in order to protect the Fund from this probable downside.If the stock goes above Rs. 500, say to Rs. 515, it will not exercise itsoption. The Fund will participate in the upside of the stock, since it can nowsell the stock at the prevailing market price of Rs. 515.

Writing Options

Benefits of writing an option with underlying stock holding (Covered callwriting)

Covered call writing is a strategy where a writer (say the Fund) will hold aparticular stock, and sell in the market a call option on the stock. Here thebuyer of the call option has the right to buy this stock from the writer (theFund) at a particular price which is fixed by the contract (the strike price).The writer receives a premium for selling a call, but if the call option isexercised, he has to sell the underlying stock at the strike price. This isadvantageous if the strike price is the level at which the writer wants to exithis holding / book profits. The writer effectively gains a fixed premium inexchange for the probable opportunity loss that comes from giving up anyupside if the stock goes up beyond the strike price.

Illustration

Let us take for example Maruti Udyog Ltd. where the Fund holds stock, thecurrent market price assuming being Rs. 500. The Fund Manager holds theview that the stock should be sold when it reaches Rs. 530. Currently the 1month 530 calls can be sold at say Rs.25. Selling this call gives the callowner the right to buy from the Fund, Maruti Udyog Ltd. at Rs. 530. Nowthe Fund by buying / holding the stock and selling the call is effectivelyagreeing to sell Maruti Udyog Ltd. at Rs. 530 when it crosses this price. Sothe Fund is giving up any possible upside beyond Rs. 530. However, thereturns for the Fund are higher than what it would have got if it just held the

stock and decided to sell it at Rs. 530. This is because the Fund by writingthe covered call gets an additional Rs. 25 per share of Maruti Udyog Ltd., Incase the price is below Rs. 530 during the tenure of the call, then it will notbe exercised and the Fund will continue to hold the shares. Even in thiscase the returns are higher than those if the Fund had just held the stockwaiting to sell it at Rs. 530.

Benefits of writing put options with adequate cash holding

Writing put options with adequate cash holdings is a strategy where thewriter (say, the Fund) will have an amount of cash and will sell put optionson a stock. This will give the buyer of this put option the right to sell stock tothe writer (the Fund) at a pre-designated price (the strike price). This strategygives the put writer a premium, but if the put is exercised, he has to buy theunderlying stock at the designated strike price. In this case the writer willhave to accept any downside if the stock goes below the exercise price.The writer effectively gains a fixed premium in exchange for giving up theopportunity to buy the stock at levels below the strike price. This isadvantageous if the strike price is the level at which the writer wants to buythe stock.

Illustration

Let us take for example, that the Fund wants to buy Maruti Udyog Ltd. atRs. 480, the current price being Rs. 500. Currently the three-month putscan be sold at say Rs. 55. Writing this put gives the put owner the right tosell to the Fund, Maruti Udyog Ltd. at Rs. 480. Now the Fund by holdingcash and selling the put is agreeing to buy Maruti Udyog Ltd. at Rs. 480when it goes below this price. The Fund will take on itself any downside ifthe price goes below Rs. 480. But the returns for the Fund are higher thanwhat it would have got if it just waited till the price reached this level andbought the stock at Rs. 480, as per its original view. This is because theFund by writing the put gets an additional Rs. 55 per share of Maruti UdyogLtd. In case the price stays above Rs. 480 during the tenure of the put, thenit will not be exercised and the Fund will continue to hold cash. Even in thiscase the returns are higher than if the Fund had just held cash waiting tobuy Maruti Udyog Ltd. at Rs. 480.

Risk factors

As and when the Scheme trades in the derivatives market there are riskfactors and issues concerning the use of derivatives that investors shouldunderstand. Derivative products are specialised instruments that requireinvestment techniques and risk analyses different from those associatedwith stocks and bonds. The use of a derivative requires an understandingnot only of the underlying instrument but also of the derivative itself.Derivatives require the maintenance of adequate controls to monitor thetransactions entered into, the ability to assess the risk that a derivative addsto the portfolio and the ability to forecast price or interest rate movementscorrectly. There is the possibility that a loss may be sustained by the portfolioas a result of the failure of another party (usually referred to as the “counterparty”) to comply with the terms of the derivatives contract. Other risks inusing derivatives include the risk of mispricing or improper valuation ofderivatives and the inability of derivatives to correlate perfectly withunderlying assets, rates and indices. Thus, derivatives are highly leveragedinstruments. Even a small price movement in the underlying security couldhave a large impact on their value. Also, the market for derivative instrumentsis nascent in India.

Valuation of Derivative Products

u The traded derivatives shall be valued at market price in conformitywith the stipulations of sub clauses (i) to (v) of clause 1 of the EighthSchedule to the Securities and Exchange Board of India (Mutual Funds)Regulations, 1996, as amended from time to time.

u The valuation of untraded derivatives shall be done in accordance withthe valuation method for untraded investments prescribed in subclauses (i) and (ii) of clause 2 of the Eighth Schedule to the Securitiesand Exchange Board of India (Mutual Funds) Regulations, 1996 asamended from time to time.

POLICY ON OFFSHORE INVESTMENTS BY THE SCHEME

The Scheme may, with the approval of SEBI invest in :

a) ADRs / GDRs issued by Indian Companies and in foreign securities

b) Foreign debt securities in the countries with fully convertible currencies,short-term as well as long-term debt instruments with highest rating(foreign currency credit rating) by accredited /registered credit ratingagencies, say A- 1/AAA by Standard & Poor, P-1 /AM by Moody’s,F1 /AAA by Fitch IBCA, etc.

c) Government securities where the countries are AAA rated.

The Mutual Fund may invest in foreign securities upto 10% of their netassets as on January 31 of each relevant year, subject to a limit of a minimumof US$ 5 million and a maximum of US $ 50 million or such other limitprescribed by SEBI.

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Subject to the approval of the RBI / SEBI and conditions as may be prescribedby them, the Mutual Fund may open one or more foreign currency accountsabroad either directly, or through the custodian/sub-custodian, to facilitateinvestments and to enter into/deal in forward currency contracts, currencyfutures, interest rate futures/swaps, currency options for the purpose ofhedging the risks of assets of a portfolio or for its efficient management.

Overseas Debt Market

The nature and number of debt instruments available in international debtmarkets is very wide. In terms of diverse instruments as well as liquidity,overseas debt markets offer great depth and are extremely well-developed.

Investment in international debt greatly expands the universe of top qualitydebt, which is no longer restricted to the limited papers available in thedomestic debt market. The higher rated overseas sovereign, quasi-government and corporate debt offer lower default risk in addition to offeringa high degree of liquidity since these are traded across major internationalmarkets. Investments in rated international debt offer multiple benefits ofrisk reduction, a much wider universe of top quality debt and also potentialgains from currency movements.

Investments in international markets are most often in U.S. dollars, thoughthe Euro, Pound Sterling and the Yen are also major currencies. Though thismarket is geographically well-spread across global financial centres, themarkets in the U.S., European Union and London offer the most liquidityand depth of instruments.

Besides factors specific to the country / issuer, international bond prices areinfluenced to a large extent by a number of other factors; chief among theseare the international economic outlook, changes in interest rates in majoreconomies, trading volumes in overseas markets, cross currencymovements among major currencies, rating changes of countries /corporations and major political changes globally.

The current yields in the US Bond Market are as follows:

Maturity US Treasury yields (%)

3 months 4.32502

6 months 4.3756

2 years 4.491

5 years 4.441

10 years 4.5210

30 years 4.69670

Maturity US AAA Corporate Bond yields (%)

1 year 4.7469

5 years 4.8485

10 years 5.0704

The overseas securities markets offer new investment and portfoliodiversification opportunities by enabling investments in the overseasmarkets. However, such investments also entail additional risks. Suchinvestment opportunities may be pursued by the Scheme provided theyare considered appropriate in terms of the overall investment objectives ofthe Scheme.

Risk factors associated with investing in ADR/GDR/Foreign DebtSecurities

Currency Risk :

Moving from Indian Rupee (INR) to any other currency entails currency risk.To the extent that the assets of the Scheme will be invested in securitiesdenominated in foreign currencies, the Indian Rupee equivalent of the netassets, distributions and income may be adversely affected by changes inthe value of certain foreign currencies relative to the Indian Rupee.

Interest Rate Risk :

The pace and movement of interest rate cycles of various countries, thoughloosely co-related, can differ significantly. Hence by investing in securitiesof countries other than India, we stand exposed to their interest rate cycles.

Credit Risks :

This is substantially reduced since the regulations stipulate investmentsonly in papers rated AAA by S&P, Moodys or Fitch IBCA.

To manage risks associated with foreign currency and interest rate exposure,the Scheme may use derivatives for efficient portfolio management includinghedging and in accordance with conditions as may be stipulated by anyregulatory authority from time to time.

Exposure Limits :

The Scheme, subject to the asset allocation pattern, will under normalcircumstances limit its exposure to investment in Debt Securities upto amaximum of 50% of its net assets. Such investments would be subject to

the overall limit specified by the SEBI from time to time. However, theAMC with a view to protecting the interest of the investors may increase ordecrease this exposure as deemed fit from time to time subject to theregulatory limit.

Benefits of International Investing :

u Diversification of risk

Investing in Foreign Debt Securities allows the investor to move awayfrom a single country, single currency and single market format.

u Better credit quality

Since the investment in Foreign Debt Securities will only be in papersrated AAA by S&P or Moody’s or Fitch IBCA etc. the credit quality ofsuch papers will be much superior to the papers available domestically.

u Wider choice of investment opportunities

The overseas debt markets allows investors access to a choice ofinvestment avenues / instruments. These markets are also typicallymore liquid than domestic markets.

The Mutual Fund may, where necessary appoint intermediaries as sub-managers, sub-custodians, etc. for managing and administering suchinvestments. The appointment of such intermediaries shall be in accordancewith the applicable requirements of SEBI and within the permissible ceilingsof expenses.

INVESTMENT DECISIONS

The Board of Directors of the AMC has constituted an Investment Committeeof the AMC. This Committee will clearly lay down the various policies andprocesses covering Investments for the Scheme in light of the SEBIRegulations and will oversee implementation of the investment process.The Fund Manager will continuously monitor all investment decisions andits impact on the performance of the Scheme and carry out suitableadjustment at periodic intervals. The Head of Asset Management Operationsis also a member of the Investment Committee.

The Investment Committee will periodically review the performance of theScheme and general market outlook. The Investment Committee will reportinto the Board of Directors of the AMC.

Periodic presentations will be made to the Board of Directors of the AMCand Trustee Company to review and monitor the performance of the Schemeagainst the Benchmark chosen for the Scheme.

The Fund Manager shall ensure that the funds of the Scheme are investedto achieve the investment objectives of the Scheme and in the interest ofthe Unitholders. All investment decisions shall be recorded

PORTFOLIO TURNOVER

The Scheme is an Open-Ended Scheme(s). It is expected that there wouldbe a number of Subscriptions and Redemptions on a daily basis.Consequently, it is difficult to estimate with any reasonable measure ofaccuracy, the likely turnover in the portfolio.

Pursuant to the SEBI Regulations the cost of investments acquired orpurchased shall include brokerage, stamp charges and any charge customarilyincluded in the broker’s bought note.

INVESTMENT RESTRICTIONS

Pursuant to the SEBI Regulations, the following investment restrictions areapplicable to the Scheme:

u A Scheme of the Mutual Fund shall not invest more than 10 percent ofits NAV in equity shares or equity related instruments of any companyand in listed securities / units of Venture Capital Funds. Provided thatthe limit of 10% shall not be applicable for investments in case ofindex fund or sector/industry specific scheme.

u A Scheme shall not invest more than 5% of its NAV in the unlistedequity shares or equity related instruments and in unlisted securities /units of Venture Capital Funds.

u A Scheme shall not invest more that 15% of its NAV in debt instruments[irrespective of residual maturity period (above or below one year)],issued by a single issuer which are rated not below investment gradeby a credit rating agency authorised to carry out such activity underthe SEBI Act. Such investment limit may be extended to 20% of theNAV of the Scheme with the prior approval of the Trustee and theBoard of the AMC/Committee constituted for this purpose.

Provided that such limit shall not be applicable for investments inGovernment Securities and money market instruments.

Provided further that investment within such limit can be made inmortgaged backed securitised debt which are rated not belowinvestment grade by a credit rating agency registered with SEBI.

u A Scheme shall not invest more than 10% of its NAV in unrated debtinstruments [irrespective of residual maturity period (above or below

20



one year)], issued by a single issuer and the total investment in suchinstruments shall not exceed 25% of the NAV of the Scheme. All suchinvestments shall be made with the prior approval of the Trustee andthe Board of the AMC or a Committee constituted in this behalf.

u The above investment limits are applicable to all debt securities whichare issued by public bodies / institutions such as electricity boards,municipal corporations, state transport corporations, etc., guaranteedby either the state or central government.

u The Mutual Fund under all its Scheme shall not own more than tenpercent of any Company’s paid up capital carrying voting rights.

u Transfer of investments from one Scheme to another Scheme in thesame Mutual Fund, shall be allowed only if:-

u such transfers are done at the prevailing market price for quotedSecurities on spot basis

Explanation : spot basis shall have the same meaning as specifiedby Stock Exchange for spot transactions

u the Securities so transferred shall be in conformity with theinvestment objective of the Scheme to which such transfer hasbeen made.

u A Scheme may invest in another scheme under the same assetmanagement company or any other mutual fund without charging anyfees, provided that aggregate inter-scheme investment made by allschemes under the same asset management company or in schemesunder the management of any other asset management shall notexceed 5% of the net asset value of the Mutual Fund. Provided thatthis clause shall not apply to any Fund of Fund schemes.

u If any company invests more than 5 percent of the NAV of the Schemethen investment made by any other scheme of the Mutual Fund inthat company or its subsidiaries will be disclosed in accordance withthe SEBI Regulations.

u The initial issue expenses in respect of any Scheme may not exceed6% of the funds raised under that Scheme.

u The Mutual Fund will buy and sell securities on the basis of deliveriesand will in all cases of purchase, take delivery of relative securities andin all cases of sale, deliver the securities and shall in no case put itselfin a position whereby it has to make short sales or carry forwardtransactions or engage in badla finance (carry forward).

Provided that the Mutual Fund shall enter into derivative transactionsin a recognised stock exchange for the purpose of hedging and portfoliobalancing, in accordance with the guidelines issued by SEBI.

u The Mutual Fund shall get the securities purchased or transferred inthe name of the Mutual Fund on account of the concerned Scheme,wherever the investments are intended to be of a long term nature.

u Pending deployment of funds of the Scheme in securities in terms ofthe investment objective of the Scheme, the Mutual Fund can investthe funds of the Scheme in short term deposits of scheduledcommercial banks.

u A Scheme shall not make any investments in:

u any unlisted security of an associate or group company of theSponsor; or

u any security issued by way of private placement by an associateor group company of the Sponsor; or

u the listed securities of group companies of the Sponsor which isin excess of 25% of the net assets.

u The Scheme shall not make any investment in any fund of fundsscheme.

u No loans for any purpose shall be advanced by the Scheme.

u The Mutual Fund may lend securities in accordance with the stock-lending scheme of SEBI.

u Investments in ADRs / GDRs issued by the Indian companies, foreignsecurities would be upto 5% of the net assets of this scheme.

u The Scheme may enter into interest rate derivative transactions as perthe provisions of SEBI circular no. SEBI/MFD/CIR No. 03/ 158 /03 datedJune 10, 2003 and all other applicable provisions in this regard.

Investment restrictions for equity derivatives transactions:

The scheme may enter into derivatives in line with the guidelines prescribedby SEBI vide Circular Number DNPD/Cir-29/2005 dated September 14, 2005and No. DNPD/CIR-30/2006 dated January 20, 2006, the exposure limit perscrip/instrument shall be to the extent permitted by the SEBI Regulation forthe time being in force.

Currently, the position limits for Mutual Funds and its schemes, as permittedby the SEBI Regulations, are as under:

i. Position limit for Mutual Funds in index options contracts:

1. The Mutual Fund position limit in all index options contracts on aparticular underlying index shall be Rs. 250 crore or 15% of the total

open interest of the market in index options, whichever is higher, perStock Exchange.

2. This limit would be applicable on open positions in all options contractson a particular underlying index.

ii. Position limit for Mutual Funds in index futures contracts:

1. The Mutual Fund position limit in all index futures contracts on aparticular underlying index shall be Rs. 250 crore or 15% of the totalopen interest of the market in index futures, whichever is higher, perStock Exchange.

2. This limit would be applicable on open positions in all futures contractson a particular underlying index.

iii. Additional position limit for hedging :

In addition to the position limits at point (i) and (ii) above, Mutual Fundsmay take exposure in equity index derivatives subject to the followinglimits:

1. Short positions in index derivatives (short futures, short calls and longputs) shall not exceed (in notional value) the Mutual Fund’s holding ofstocks.

2. Long positions in index derivatives (long futures, long calls and shortputs) shall not exceed (in notional value) the Mutual Fund’s holding ofcash, government securities, T-Bills and similar instruments.

iv. Position limit for Mutual Funds for stock based derivative contracts :

The Mutual Fund position limit in a derivative contract on a particularunderlying stock, i.e. stock option contracts and stock futures contracts,stand modified in the following manner: -

1. For stocks having applicable market-wise position limit (MWPL) of Rs.500 crores or more, the combined futures and options position limitshall be 20% of applicable MWPL or Rs. 300 crores, whichever islower and within which stock futures position cannot exceed 10% ofapplicable MWPL or Rs. 150 crores, whichever is lower.

2. For stocks having applicable market-wise position limit (MWPL) lessthan Rs. 500 crores, the combined futures and options position limitwould be 20% of applicable MWPL and futures position cannot exceed20% of applicable MWPL or Rs. 50 crore which ever is lower.

3. The MWPL and client level position limits however would remain thesame as prescribed.

v. Position limit for each scheme of a Mutual Fund :

The scheme-wise position limit / disclosure requirements shall be –

1. For stock option and stock futures contracts, the gross open positionacross all derivative contracts on a particular underlying stock of ascheme of a mutual fund shall not exceed the higher of:

1% of the free float market capitalisation (in terms of number of shares)

Or

5% of the open interest in the derivative contracts on a particularunderlying stock (in terms of number of contracts)

2. This position limits shall be applicable on the combined position in allderivative contracts on an underlying stock at a Stock Exchange.

3. For index based contracts, Mutual Funds shall disclose the total openinterest held by its scheme or all schemes put together in a particularunderlying index, if such open interest equals to or exceeds 15% ofthe open interest of all derivative contracts on that underlying index.

All Investment Restrictions shall be applicable at the time of makinginvestment.

Apart from the Investment Restrictions prescribed under the SEBIRegulations, internal risk parameters for limiting exposure to a particularscrip or sector may be prescribed from time to time to respond to the dynamicmarket conditions and market opportunities. The AMC/Trustee may alterthe above Investment Restrictions from time to time to the extent thatchanges in the SEBI Regulations may allow and as deemed fit in the generalinterest of the Unitholders.

COMPUTATION OF NET ASSET VALUE

The Mutual Fund will value its investments according to the valuation norms,as specified in Schedule VIII of the SEBI Regulations, or such norms as maybe specified by SEBI from time to time.

NAV of Units under the Scheme shall be calculated as shown below:

Market or Fair Value of the Plan's Investments +Current Assets - Current Liabilities and Provisions

NAV per Unit (Rs.) =No. of Units outstanding under the Plan

The AMC will calculate and disclose the first NAV of the Scheme not laterthan 30 days from the closure of New Fund Offer Period. Subsequently, theNAV of the Scheme will be disclosed at the close of every Business Day.

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Separate NAVs will be calculated and announced for each of the Optionsunder the Plan(s) of the Scheme. The NAVs will be rounded off upto 4 decimalplaces for the Scheme. The Units will be allotted upto 3 decimal places.

VALUATION OF THE SCHEME’S ASSETS ANDDETERMINATION OF NET ASSET VALUE (NAV)

The NAV of the Units of the Scheme will be computed by dividing the netassets of the Scheme by the number of Units outstanding on the valuationdate. The Mutual Fund will value its investments according to the valuationnorms, as specified in the Schedule VIII of the SEBI Regulations, or suchnorms as may be prescribed by SEBI from time to time. The broad valuationnorms pertaining to the Scheme are detailed below :

1. Traded Securities

u Traded securities are valued at the last quoted closing price on theNational Stock Exchange of India Limited (NSEIL).

u When the Securities are traded on more than one recognised stockexchange, the Securities shall be valued at the last quoted closingprice on the stock exchange where the security is principally traded.The AMC will select the appropriate stock exchange, but the reasonsfor the selection would be recorded in writing. All scrips may be valuedat the prices quoted on the stock exchange where a majority in valueof the investments are principally traded. Once a Stock Exchange hasbeen selected for valuation of a particular security, reasons for changeof the exchange shall be recorded in writing by the AMC.

u When on a particular valuation day, a security has not been traded onthe principal stock exchange, the value at which it is traded on anotherstock exchange will be used.

u When a security (other than debt securities) is not traded on any stockexchange on a particular valuation day, the value at which it was tradedon the principal stock exchange, as the case may be, on the earliestprevious day is used provided such date is not more then 30 days priorto valuation date.

u When a debt security (other than Government securities) is not tradedon any stock exchange on a particular valuation day, the value at whichit was traded on the principal stock exchange or any other stockexchange, as the case may be, on the earliest previous day may beused, provided such date is not more than 15 days prior to valuationdate.

u When a debt security (other than Government Securities) is purchasedby way of private placement, the value at which it was bought may beused for a period of 15 days beginning from the date of purchase.

2. Thinly Traded Securities

Thinly Traded Equity / Equity related securities

u When trading in an Equity / Equity related securities in a month is bothless than Rs 5 lakhs and the total volume is less than 50,000 shares, itshall be considered as a thinly traded security and valued accordingly.Further it is clarified that in order to determine whether a security isthinly traded or not, the volumes traded in all recognised stockexchanges in India may be taken into account.

u Non-Traded / Thinly Traded Equity Securities will be fair valued as perprocedures determined by the AMC and approved by Trustee of theMutual Fund, in accordance with the SEBI Regulations and relatedcirculars.

u In case trading in an equity security is suspended upto 30 days, thenthe traded price would be considered for valuation of that security. Ifan equity security is suspended for more than 30 days, then the AMC /Trustees will decided the valuation norms to be followed and suchnorms would be documented and recorded.

Thinly Traded Debt Securities

· A debt security (other than Government Securities) is considered as athinly traded security if on the valuation date, there are no individualtrades in that security in marketable lots (presently Rs 5 crore) on theprincipal stock exchange or any other stock exchange. Further it isclarified that in order to determine whether a security is thinly tradedor not, the volumes traded in all recognised stock exchanges in Indiamay be taken into account.

u· A thinly traded debt security as defined above would be valued as pernorms set for non-traded debt security.

3. Non-Traded Securities

Equity Securities

· When a security (other than debt securities) is not traded on any stockexchange for a period of 30 days prior to the valuation date, the scripwill be treated as a non traded security

Debt Securities

· When a debt security (other than Government Securities) is not tradedon any stock exchange for a period of 15 days prior to the valuationdate the scrip would be treaded as a non-traded security.

Valuation of Non-traded / thinly traded Securities

Non-traded / thinly traded securities shall be valued “in good faith” by theAMC on the basis of valuation principles laid down below :

Non-traded / Thinly traded equity securities

a. Based on the latest available Balance Sheet, net worth shall becalculated as follows :

b. Net Worth per share = [share capital + reserves (excluding revaluationreserves) – Misc. expenditure and Debit Balance in P&L A/c] Dividedby No. of Paid up Shares.

c. Average capitalisation rate (P/E ratio) for the industry based upon eitherBSE or NSE data (which should be followed consistently and changes,if any noted with proper justification thereof) shall be taken anddiscounted by 75% i.e. only 25% of the Industry average P/E shall betaken as capitalisation rate (P/E ratio). Earnings per share of the latestaudited annual accounts will be considered for this purpose.

d. The value as per the net worth value per share and the capital earningvalue calculated as above shall be averaged and further discounted by10% for ill-liquidity so as to arrive at the fair value per share.

e. In case the EPS is negative, EPS value for that year shall be taken aszero for arriving at capitalised earning.

f. In case where the latest balance sheet of the company is not availablewithin nine months from the close of the year, unless the accountingyear is changed, the shares of such companies shall be valued at zero.

g. In case an individual security accounts for more than 5% of the totalassets of the scheme, an independent valuer shall be appointed forthe valuation of the said security. To determine if a security accountsfor more than 5% of the total assets of the scheme, it should be valuedby the procedure above and proportion which it bears to the total netassets of the scheme to which it belongs would be compared on thedate of valuation

Non-Traded / Thinly Traded Debt Securities of Upto 182 Days to

Maturity:

Non-Traded / Thinly Traded Debt securities / asset backed securitiespurchased with residual maturity of upto 182 days are valued at cost(including accrued interest till the beginning of the day) plus the differencebetween the redemption value (inclusive of interest) and cost spreaduniformly over the remaining maturity period of the instrument. Non Traded /Thinly Traded Debt securities/ asset backed securities purchased withmaturity greater than 182 days at the time of purchase, the last valuationprice plus accrued interest is used instead of purchase cost.

Non-Traded / Thinly Traded Debt Securities of over 182 days to Maturity

For the purpose of valuation, all Non Traded / Thinly Traded Debt Securitieswould be classified into “Investment grade” and “Non Investment grade”securities based on their credit ratings. The non-investment grade securitieswould further be classified as “Performing” and “Non Performing” assets

u All Non Government investment grade debt securities, classified asnot traded, shall be valued on yield to maturity basis as described below.

u All Non Government non investment grade performing debt securitieswould be valued at a discount of 25% to the face value

u All Non Government non investment grade non performing debtsecurities would be valued based on the provisioning norms.

The approach in valuation of non traded debt securities is based on theconcept of using spreads over the benchmark rate to arrive at the yields forpricing the non traded security.

The Yields for pricing the non traded debt security would be arrived at byusing the process prescribed in the SEBI Guidelines for valuation of securities,from time to time.

4. Government Securities

Government Securities are valued at the prices released by CRISIL,which is currently the only approved agency suggested by Associationof Mutual Funds in India (AMFI).

5. Derivative Products

u The traded derivative shall be valued at market price in conformitywith the stipulations of sub clause (i) to (v) of clause 1 of the EighthSchedule to the SEBI Regulations.

u The valuation of untraded derivatives shall be done in accordance withthe valuation method for untraded investments prescribed in subclauses (i) and (ii) of clause 2 of the Eighth Schedule to the SEBIRegulations.

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6. Valuation of Securities with Put / Call options

The option embedded securities would be valued as follows:

(i) Securities with Call option :

(a) The securities with call option shall be valued at the lower of thevalue as obtained by valuing the security to final maturity andvaluing the security to call option.

(b) In case there are multiple call options, the lowest value obtainedby valuing to the various call dates and valuing to the maturitydate is to be taken as the value of the instrument.

(ii) Securities with Put option

(a) The securities with put option shall be valued at the higher of thevalue as obtained by valuing the security to final maturity andvaluing the security to put option

(b) In case there are multiple put options, the highest value obtainedby valuing to the various put dates and valuing to the maturitydate is to be taken as the value of the instruments.

(iii) Securities with both Put and Call option on the same day

The securities with both Put and Call option on the same day would bedeemed to mature on the Put/Call day and would be valued accordingly.

7. Others

u While investments in call money, bills purchased under rediscountingscheme and short term deposits with banks shall be valued at costplus accrual; other money market instruments shall be valued at theyield at which they are currently traded. For this purpose, non-tradedinstruments, that is instruments not traded for a period of 7 days, willbe valued at cost plus interest accrued till the beginning of the dayplus the difference between the redemption value and the cost spreaduniformly over the remaining maturity period of the instruments;

u Where instruments have been bought on ‘repo’ basis, the instrumentwould be valued at the resale price after deduction of applicable interestupto date of resale. Where an instrument has been sold on a ‘repo’basis, adjustment would be made for the difference between theRedemption price (after deduction of applicable interest upto date ofRedemption) and the value of the instrument. If the Redemption priceexceeds the value, the depreciation will be provided for and if theRedemption price is lower than the value, credit will be taken for theappreciation.

u In respect of convertible debentures and bonds, the non-convertibleand convertible components shall be valued separately. The non-convertible component would be valued on the same basis as wouldbe applicable to a debt instrument. The convertible component wouldbe valued on the same basis as would be applicable to an equityinstrument. If, after conversion, the resultant equity instrument wouldbe traded pari passu with an existing instrument which is traded, thevalue of the latter instrument can be adopted after an appropriatediscount for the non-tradability of the instrument during the periodpreceding the conversion. While valuing such instruments, the factwhether the conversion is optional would also be factored in.

u In respect of warrants to subscribe for shares, attached to instruments,the warrants would be valued at the value of the share which wouldbe obtained on exercise of the warrant as reduced by the amountwhich would be payable on exercise of the warrant. A discount similarto the discount to be determined in respect of convertible debentureswould be deducted to account for the period which must elapse beforethe warrant can be exercised.

u Until they are traded, the value of the “rights” shares would becalculated as :

Vr = n/m * (Pex - Pof)

where

Vr = Value of rights

n = no. of rights offered

m = no. of original shares held

Pex = Ex-Rights price

Pof = Rights Offer price

Where the rights are not treated pari-passu with the existing shares,suitable adjustments would be made to the value of rights. Where it isdecided not to subscribe for the rights but to renounce them andrenunciations are being traded, the rights would be valued at therenunciation value.

u Valuation Norms for Unlisted securities

Investments in Unlisted securities shall be valued “in good faith” onthe basis of the valuation principles laid down below till such timethese are listed on a Stock Exchange.

(a) Based on the latest available audited balance sheet, net worthshall be calculated as lower of (i) and (ii) below:

i. Net worth per share = [share capital plus free reserves(excluding revaluation reserves) minus Miscellaneousexpenditure not written off or deferred revenue expenditure,intangible assets and accumulated losses] divided by Numberof Paid up Shares.

ii. After taking into account the outstanding warrants andoptions, Net worth per share shall again be calculated andshall be = [share capital plus consideration on exercise ofOption/Warrants received/receivable by the Company plusfree reserves(excluding revaluation reserves) minusMiscellaneous expenditure not written off or deferredrevenue expenditure, intangible assets and accumulatedlosses] divided by {Number of Paid up Shares plus Numberof Shares that would be obtained on conversion/exercise ofOutstanding Warrants and Options}

The lower of (i) and (ii) above shall be used for calculation ofnet worth per share and for further calculation in (c) below.

(b) Average capitalisation rate (P/E ratio) for the industry based uponeither BSE or NSE data (which should be followed consistentlyand changes, if any, noted with proper justification thereof) shallbe taken and discounted by 75% i.e. only 25% of the Industryaverage P/E shall be taken as capitalisation rate (P/E ratio). Earningsper share of the latest audited annual accounts will be consideredfor this purpose.

(c) The value as per the net worth value per share and the capitalearning value calculated as above shall be averaged and furtherdiscounted by 15% for illiquidity so as to arrive at the fair valueper share.

The above methodology for valuation shall be subject to the followingconditions:

i. All calculations as aforesaid shall be based on audited accounts.

ii. In case where the latest balance sheet of the company is notavailable within nine months from the close of the year, unlessthe accounting year is changed, the shares of such companiesshall be valued at zero.

iii. If the net worth of the company is negative, the share would bemarked down to zero.

iv. In case the EPS is negative, EPS value for that year shall be takenas zero for arriving at capitalised earning.

v. In case an individual security accounts for more than 5% of thetotal assets of the scheme, an independent valuer shall beappointed for the valuation of the said security. To determine if asecurity accounts for more than 5% of the total assets of thescheme, it should be valued in accordance with the procedure asmentioned above on the date of valuation.

At the discretion of the AMC and with the approval of the trustees, anunlisted equity share may be valued at a price lower than the value derivedusing the aforesaid methodology.

The above methodology will not be applicable for investment made in theinitial public offers of the companies (IPOs) or firm allotment in public issueswhere all the regulatory requirements and formalities pertaining to publicissues have been complied with by the companies and where the MutualFund is required to pay just before the date of public issue.

u Illiquid Securities :

(a) Aggregate value of “illiquid securities” of the scheme, which aredefined as non-traded, thinly traded and unlisted equity shares,shall not exceed 15% of the total assets of the scheme and anyilliquid securities held above 15% of the total assets shall beassigned zero value.

(b) All funds shall disclose as on March 31 and September 30 thescheme-wise total illiquid securities in value and percentage ofthe net assets while making disclosures of half yearly portfoliosto the Unitholders. In the list of investments, an asterisk markshall also be given against all such investments which arerecognised as illiquid securities.

(c) Mutual Funds shall not be allowed to transfer illiquid securitiesamong their schemes w.e.f. October 1, 2000.

u Valuation in respect of Non Performing Assets

Valuation in respect of Non Performing Assets (Debt Securities) willbe done in accordance with “SEBI guidelines for identification andprovisioning for NPAs” issued vide circular dated 18th September, 2000bearing reference no. MFD/CIR/8/92/2000 as modified by SEBI circulars

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both dated 28th March, 2001 bearing reference no. MFD/CIR/13/087/2001 as well as MFD/CIR/14/088/2001 and will form a part of thisvaluation policy.

All expenses and incomes accrued upto the valuation date shall be consideredfor computation of net asset value. For this purpose, major expenses likemanagement fees and other periodic expenses would be accrued on a dayto day basis. The other minor expenses and income will be accrued on aperiodic basis, provided the non-accrual does not affect the NAV calculationsby more than 1%.

Any changes in securities and in the number of Units will be recorded in thebooks not later than the first valuation date following the date of transaction.If this is not possible given the frequency of the Net Asset Value disclosure,the recording may be delayed upto a period of 7 days following the date ofthe transaction, provided that as a result of the non-recording, the Net AssetValue calculations shall not be affected by more than 1%.

In case the Net Asset Value of a Scheme differs by more than 1 %, due tonon - recording of the transactions, the investors or Scheme as the casemay be, shall be paid the difference in amount as follows:-

(i) If the investors are allotted Units at a price higher than Net Asset Valueor are given a price lower than Net Asset Value at the time of sale oftheir Units, they shall be paid the difference in amount by the Scheme.

(ii) If the investors are charged lower Net Asset Value at the time ofpurchase of their Units or are given higher Net Asset Value at the timeof sale of their Units, the AMC shall pay the difference in amount tothe Scheme. The AMC may recover the difference from the investors.

The valuation guidelines as outlined above are as per the SEBI Regulationsand are subject to change from time to time in conformity with changesmade by SEBI.

ACCOUNTING POLICIES & STANDARDS

In accordance with Regulation 50 read with the Ninth Schedule to the SEBIRegulations, the Scheme shall follow the accounting policies and standardsstated below:

u All investments will be marked to market and will be carried in thebalance sheet at market value. However, since the unrealised gainarising out of appreciation on investments cannot be distributed,provision will be made for exclusion of this item when arriving atdistributable income.

u Dividend income earned by a scheme should be recognised, not onthe date the dividend is declared, but on the date the share is quotedon an ex-dividend basis. For investments which are not quoted on thestock exchange, dividend income must be recognised on the date ofdeclaration.

u In respect of all interest-bearing investments, income will be accruedon a day to day basis as it is earned. Therefore when such investmentsare purchased, interest paid for the period from the last interest duedate upto the date of purchase shall not be treated as a cost of purchasebut shall be debited to Interest Recoverable Account. Similarly, interestreceived at the time of sale for the period from the last interest duedate upto the date of sale shall not be treated as an addition to salevalue but shall be credited to Interest Recoverable Account.

u In determining the holding cost of investments and the gains or losson sale of investments, the “average cost” method shall be followed.

u Bonus shares to which the scheme becomes entitled should berecognised only when the original shares on which the bonusentitlement accrues are traded on the stock exchange on an ex-bonusbasis. Similarly, rights entitlements should be recognised only whenthe original shares on which the right entitlement accrues are tradedon the stock exchange on an ex-rights basis.

u Transactions for purchase or sale of investments would be recognisedas of the trade date and not as of the settlement date, so that theeffect of all Investments traded during a financial year are recordedand reflected in the financial statements for that year. When investmenttransactions take place outside the stock market, for example,acquisitions through private placement or purchases or sales throughprivate treaty, the transaction would be recorded, in the event of a

purchase, as of the date on which the Scheme obtains an enforceableobligation to pay the price or, in the event of a sale, when the Schemeobtains an enforceable right to collect the proceeds of sale or anenforceable obligation to deliver the instruments sold.

u An ‘asset’ shall be classified as non performing, if the interest and / orprincipal amount have not been received or remained outstanding forone quarter from the day such income / instalment has fallen due.After the expiry of the 1st quarter from the date the income has fallendue, there will be no further interest accrual on the asset. In short,from the beginning of the 2nd calendar quarter there will be no furtheraccrual on income.

u Where income receivable on investments has accrued but has notbeen received for the period specified in the guidelines issued by SEBI,provision shall be made by debiting to the revenue account, the incomeso accrued in the manner specified by the guidelines issued by SEBI.

u When Units are sold, the difference between the Sale price and theface value of the Unit, if positive shall be credited to reserves and ifnegative will be debited to reserves, the face value being credited toCapital Account. Similarly, When Units are Redeemed, the differencebetween the repurchase price and face value of the Unit, if positive,shall be debited to reserves, and, if negative, shall be credited toreserves, the face value being debited to the Capital account.

u When Units are sold, an appropriate part of the Sale proceeds shall becredited to an Equalisation Account and when Units are Redeemed,an appropriate amount would be debited to Equalisation Account. Thenet balance on this account shall be credited or debited to the RevenueAccount. The balance on the Equalisation Account debited or creditedto the Revenue Account shall not decrease or increase the net incomeof the Mutual Fund but is only an adjustment to the distributable surplus.It shall therefore, be reflected in the Revenue Account only after thenet income of the Mutual Fund is determined.

u The cost of investments acquired or purchased would include,brokerage, stamp charges and any charge customarily included in thebroker’s bought note. In respect of privately placed debt instrumentsany front-end discount offered shall be reduced from the cost of theinvestment.

u Underwriting commission shall be recognised as revenue only whenthere is no devolvement on the Scheme. Where there is devolvementon the Scheme, the full underwriting commission received and notmerely the portion applicable to the devolvement shall be reduced fromthe cost of the investment.

The accounting polices and standards outlined above are as per the existingSEBI Regulations and are subject to changes to be in compliance to reflectthe changes in the SEBI Regulations. All other policies and standards asspecified therein, as well as any additions / modifications thereto as may bespecified by SEBI from time to time shall be adhered to while preparing thebooks of accounts and financial statements of the Mutual Fund.

UNCLAIMED REDEMPTION / DIVIDEND AMOUNT

As per circular no MFD/CIR/9/120/2000, dated November 24, 2000 issuedby SEBI, the unclaimed redemption and dividend amounts shall be deployedby the Mutual Fund in call money market or money market instrumentsonly and the investors who claim these amounts during a period of threeyears from the due date shall be paid at the prevailing Net Asset Value.After a period of three years, this amount will be transferred to a pool accountand the investors can claim the amount at NAV prevailing at the end of thethird year. The income earned on such funds will be used for the purpose ofinvestor education. The AMC will make a continuous effort to remind theinvestors through letters to take their unclaimed amounts. Further, theinvestment management fee charged by the AMC for managing unclaimedamounts shall not exceed 50 basis points.

INVESTMENT BY THE AMC IN THE SCHEME

The AMC may invest in the Scheme in the New Fund Offer Period orthereafter at any time during the continuous offer period subject to theSEBI Regulations & circulars issued by SEBI and to the extent permitted byits Board of Directors from time to time. As per the existing SEBI Regulations,the AMC will not charge investment management and advisory fee on theinvestment made by it in the Scheme.

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UNITS & THE NEW FUND OFFER

UNITS ON OFFER - GENERAL INFORMATION

1. New Fund Offer

This offer is being made for Subscription of Units of ABN AMRO FutureLeaders Fund, which is an Open-Ended Equity Scheme with no assuredreturns.

2. New Fund Offer Period

The New Fund Offer Period for the Scheme will commence from March 13,2006 and close on April 7, 2006.

3. New Fund Offer Price

The New Fund Offer Price of Units of the Scheme / Plan(s) will be Rs.10 perUnit.

4. Extension / Termination of the New Fund Offer Period

The Trustee reserves the right to extend the closing date of the New FundOffer Period for the Scheme subject to the condition that the subscriptionlist of the New Fund Offer Period shall not be kept open for more than 30days.

5. Minimum Subscription Amount

The minimum subscription (target) amount for the Scheme is Rs.1 Crore.There is no maximum target for the size of the Scheme and therefore, subjectto the applications being in accordance with the terms of this offer, full andfirm allotment will be made to all the applicants, subject to the collection ofthe minimum subscription amount.

In accordance with the SEBI Regulations, if any of the Plan(s) under theScheme fails to collect the above minimum subscription amount, the MutualFund and the AMC shall be liable to refund the subscription amount withina period of 6 weeks from the date of closure of subscription list to theapplicants of the Plan.

6. Allotment and Refund

Allotment

All applicants will receive full and firm allotment of Units, provided theapplications are complete in all respects and are found to be in order, subjectto the collection of the minimum subscription amount. The Trustee / AMCretains the sole and absolute discretion to reject any application. The processof allotment of Units and mailing of account statements reflecting theallotments will be completed within 30 days from the date of closure of theNew Fund Offer Period.

The AMC / Trustee may require or obtain verification of identity or suchother details regarding any Subscription or related information from theinvestor/Unitholders as may be required under any law, which may result indelay in dealing with the applications, Units, benefits, distribution, etc.

Refund

In accordance with the SEBI Regulations, if any of Plan(s) under the Schemefails to collect the minimum subscription amount, the Mutual Fund and theAMC shall be liable to refund the money to the applicants under that Plan.

In addition to the above, refund of subscription amount to applicants whoseapplications are invalid for any reason whatsoever, will commence after theallotment process is completed.

No Interest will be payable on any subscription amount refunded within 6weeks from the closure of the New Fund Offer Period. Interest onsubscription amount will be payable for amounts refunded later than 6 weeksfrom the closure of the New Fund Offer Period at the rate of 15% perannum for the period in excess of 6 weeks and will be charged to the AMC.Refund orders will be marked “A/c. Payee only” and will be in favour of andbe despatched to the sole / first Applicant, by registered post.

MINIMUM AMOUNT AND ADDITIONAL AMOUNT FORAPPLICATION

The minimum amount and additional amount for the Regular Plan is as under :

Option Minimum amount for Additional Amountapplication per option

Growth Option Rs. 5000 and in multiples Rs.1000 and in multiplesDividend Option of Re.1 thereafter of Re.1 thereafter

There is no upper limit on the amount for application. The Trustee / AMCreserves the right to change the minimum amount for application and theadditional amount for application from time to time in the Scheme and thesecould be different under different plan(s) / option(s).

INVESTMENT PLANS OFFERED UNDER THE SCHEME

The Scheme offers investors Regular Plan. Regular Plan offers Growth Optionand Dividend Option. The Dividend Option offers Dividend Payout and

Dividend Re-investment facilities.

u Growth Option

The Scheme will not declare any Dividend under this Option. Theincome attributable to Units under this Option will continue to remaininvested in the Option and will be reflected in the Net Asset Value ofUnits under this Option.

u Dividend Option

Under this Dividend Option, dividend if any, shall be declared by theTrustee from time to time.

Both the Options will be managed with the same portfolio.

Choice of Plan / Option(s)

Investors should indicate appropriate Option for which the Subscription ismade by indicating the choice in the appropriate box provided for this purposein the application form. In case of valid applications received withoutindicating any choice of Option, it will be considered as an option for GrowthOption and processed accordingly.

Investors may also opt to simultaneously invest in any / all Option(s) of theScheme / Plan subject to minimum Subscription requirements under suchOption(s).

DIVIDENDS & DISTRIBUTIONS

Under this Scheme, the Trustee may distribute dividend, from time to time.The Trustee’s decision with regard to the rate, timing and frequency ofdistribution shall be final.

It must be distinctly understood that the actual declaration of dividend underthe Dividend Option and the frequency thereof will inter-alia, depend on theavailability of distributable profits as computed in accordance with the SEBIRegulations. The Trustee reserves the right of dividend declaration and thedecision of the Trustee in this regard shall be final. Dividends if declared,will be paid to the Unitholders appearing in the Register of Unitholder onthe Record Date. To the extent the entire net income and realised gains arenot distributed, the same will remain invested in the Option and will bereflected in the NAV. There is no assurance or guarantee to Unitholders asto the rate of dividend distribution nor that dividend will be paid regularly.The Dividends shall be declared subject to the availability of distributablesurplus under the Option.

The AMC may announce a book closure period for the purpose of makingthe dividend payment. The Trustee at its sole discretion may declare aninterim dividend under the Dividend Option.

EFFECT OF DIVIDENDS

The NAV of the Unitholders in any of the Dividend Option will stand reducedby the amount of dividend declared. The NAV of the Growth Option willremain unaffected.

DIVIDEND RE-INVESTMENT FACILITY

Unitholders opting for the Dividend Option(s) may choose to reinvest thedividend to be received by them in additional Units of the respective Option(s)(applicable only in the Option(s) where this facility is offered). Under thisfacility, the dividend due and payable to the Unitholders will be compulsorilyand without any further act by the Unitholders, reinvested in the Scheme(under the respective Dividend Options), at a price based on the ex-dividendNet Asset Value per Unit. The amount of dividend re-invested will be net oftax deducted at source, wherever applicable. The dividends so reinvestedshall constitute a constructive payment of dividends to the Unitholders anda constructive receipt of the same amount from each Unitholder forreinvestment in Units.

On reinvestment of dividends, the number of Units to the credit of Unitholderwill increase to the extent of the dividend reinvested at the NAV as explainedabove. There shall however be no Entry / Sales Load on the dividend soreinvested.

FACILITIES

Systematic Transfer Plan (STP)

STP is a facility wherein investors of AAFDF, AAFRF, AACF and AALTFRF(and such other schemes as may be notified by the AMC from time to time)can opt to transfer a fixed amount or capital appreciation amount at regularintervals into AAFLF.

1. STP offers unitholders the following two facilities:

i) Fixed Systematic Transfer Facility (FSTF)

ii) Capital Appreciation Systematic Transfer Facility (CASTF)

Both the Facilities will offer transfers at weekly, monthly and quarterlyintervals. Unitholder is free to opt for any of the above Facilities andalso choose the frequency of such transfers.

SECTION III

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2. Under the FSTF – An investor can issue a standing instruction to transfersums at a Weekly / Monthly / Quarterly (calendar quarter) intervals toPlans / Options within select Schemes of ABN AMRO Mutual Fund.The investor has a choice between weekly, monthly and quarterly FSTF.The Transfer should be 1st or 7th or 15th or 25th of a month in theWeekly FSTF and as the 1st or 7th or 15th or 25th of a month in theMonthly FSTF and as the 1st or 7th or 15th or 25th of the first monthof quarter (e.g. 1st or 7th or 15th or 25th of January, April, July andOctober) in a Quarterly FSTF. Transfers must be for a minimum amountof Rs. 1,000/- or in multiples of Re.1/- thereafter in Weekly and MonthlyFSTF and Rs. 3,000/- and in multiples of Re.1/- in Quarterly FSTF. Aninvestor will have to opt for a minimum of 6 installments under Weeklyand Monthly STP and 2 installments under Quarterly STP. In FSTF, incase there is no minimum amount (as specified above) available in theunitholder’s account the transfer to the Transferee Scheme will nothappen and the STP request of the unitholder will stand withdrawn.

3. Under the CASTF – An investor can issue a standing instruction totransfer the entire capital appreciation from Transferor Scheme atWeekly / Monthly / Quarterly intervals to designated Scheme(s) of ABNAMRO Mutual Fund. The investor has a choice between Weekly,Monthly and Quarterly CASTF. The transfer date should be 1st or 7thor 15th or 25th of a month in the Weekly CASTF and as the 1st or 7thor 15th or 25th of a month in the Monthly CASTF and as the 1st or 7thor 15th or 25th of the first month of Quarter (e.g. 1st, 7th, 15th or 25thof January, April, July and October) in a quarterly CASTF. Transfersmust be for a minimum amount of Rs. 1,000 in Weekly and MonthlyCASTF and Rs. 3,000/- in Quarterly CASTF. An investor will have to optfor a minimum of 6 installments under Weekly and Monthly CASTF or2 installments under Quarterly CASTF. Please note that no transferwill take place if there is no minimum appreciation amount and theSTP request of the unitholder will stand withdrawn. The capitalappreciation, if any, will be calculated from the enrolment date of theCASTF under the folio, till the first transfer date (e.g. if the unit holderhas been allotted units on the 23rd of September and the date ofenrolment for monthly CASTF is the 1st of November and the unitholder has opted for 15th of every month as the transfer date, capitalappreciation, if any, will be calculated from the 1st of November to the15th of November (first transfer date). Subsequent capital appreciation,if any, will be the capital appreciation between the previous CASTFdate (where transfer has been processed) and the next CASTF date.

4. A request for STP will be treated as a request for Redemption from /Subscription into the respective Option(s) of the Scheme(s), at theapplicable NAV, subject to applicable Load.

The Trustee / AMC has a right to impose or modify the Load structure withprospective effect and to introduce an Entry and / or Exit Load and / or anyother Load or a combination thereof, subject to the maximum limits asprescribed under the SEBI Regulations.

The AMC reserves the right to have differential load structures for investorswho opt for the STP.

Investors can enrol themselves for the facility by submitting the dulycompleted STP Enrolment Form at any of the ISC. Please refer the EnrolmentForm for detailed terms and conditions of STP.

STP is available to investors on the commencement of ongoing Sale andRedemption of the Units under the Scheme after the New Fund Offer Period.

Systematic Investment Plan (SIP)

1. Under SIP the investor can for a continuous period of time invest afixed amount at regular intervals for purchasing additional Units of theScheme(s) at the Applicable NAV, subject to applicable Load.

2. SIP offers investors the following:

i) Weekly Systematic Investment Facility (WSIF) : An investor must investa minimum of Rs.1,000/- and in multiples of Re.1/- thereafter on aweekly basis by providing in advance a minimum of 6 post datedcheques, for a block of 6 weeks.

ii) Monthly Systematic Investment Facility (MSIF) : An investor mustinvest a minimum of Rs.1,000/- and in multiples of Re.1/- thereafter ona monthly basis by providing in advance a minimum of 6 post datedcheques, for a block of 6 months.

iii) Quarterly Systematic Investment Facility (QSIF) : An investor mustinvest a minimum of Rs.3,000/- and in multiples of Re.1/- thereafter ona quarterly basis by providing in advance a minimum of 2 post datedcheques, for a block of 6 months.

3. Post dated cheques for SIP should be dated 1st, 7th, 15th and 25th ofa month under WSIF. For MSIF it should be either 1st or 7th or 15th or25th of a month or first month of each quarter under QSIF (e.g. 1st or7th or 15th or 25th of January, April, July and October). In case thedate falls on a Non-Business Day or falls during a book closure period,the immediate next Business Day will be considered for the purpose

of determining the applicability of NAV subject to the realization ofcheques. Units will be allotted on the above applicable dates.

The Trustee / AMC has a right to impose or modify the Load structure withprospective effect and to introduce an Entry and / or Exit Load and / or anyother Load or a combination thereof, subject to the maximum limits asprescribed under the SEBI Regulations.

The AMC reserves the right to have differential load structures / CDSC forinvestors who opt for the SIP.

Investors can enrol themselves for the facility by submitting the duly

completed SIP Enrolment Form at any of the ISC. Please refer the

Enrolment Form for detailed terms and conditions of SIP.

SIP is available to investors on the commencement of ongoing Sale and

Redemption of the Units under the Scheme after the New Fund Offer

Period.

Systematic Withdrawal Plan (SWP)

1. Under SWP the investors can opt to withdraw (i.e. redeem from theScheme) a fixed or a variable amount from their investment accountsat periodic intervals.

2. SWP offers unitholders the following two facilities:

i) Fixed Systematic Withdrawal Facility (FSWF)

ii) Capital Appreciation Systematic Withdrawal Facility (CASWF)

3. Under the FSWF – An investor can issue a standing instruction towithdraw sums at a Monthly / Quarterly (calendar quarter) intervals.The investor has a choice between monthly and quarterly FSWF. Thewithdrawal shall be 1st of a month in the Monthly FSWF and 1st of thefirst month of quarter (e.g. 1st of January, April, July and October) in aQuarterly FSWF. Withdrawal must be for a minimum amount ofRs. 1,000/- or in multiples of Re.1/- thereafter in Monthly FSWF andRs. 3,000/- and in multiples of Re.1/- in Quarterly FSWF. An investorwill have to opt for a minimum of 6 transactions under Monthly FSWFand 2 transactions under Quarterly FSWF. If the net asset value of theUnits outstanding on the withdrawal date is insufficient to process thewithdrawal request, then the Mutual Fund will redeem all Unitsoutstanding and the SWP request will stand withdrawn for furtherprocessing.

4. Under the CASWF – An investor can issue a standing instruction towithdraw the entire capital appreciation from the Scheme at Monthly /Quarterly intervals. The investor has a choice between Monthly andQuarterly CASWF. The withdrawal date shall be 1st, of a month in theMonthly CASWF and 1st of the first month of Quarter (e.g. 1st ofJanuary, April, July and October) in a quarterly CASWF. Withdrawalmust be for a minimum amount of Rs. 1,000 in Monthly CASWF andRs. 3,000/- in Quarterly CASWF. An investor will have to opt for aminimum of 6 transactions under Monthly CASWF or 2 installmentsunder Quarterly CASWF. Please note that if there is no minimumappreciation amount on the withdrawal date, then the Mutual Fundshall process the withdrawal request for that date and the SWP requestof the unitholder will stand withdrawn for further processing. The capitalappreciation, if any, will be calculated from the enrolment date of theCASWF under the folio, till the withdrawal date (i.e. the 1st of a monthin the Monthly CASWF and 1st of the first month of Quarter in aquarterly CASWF). Subsequent capital appreciation, if any, will be thecapital appreciation between the previous CASWF date and the nextCASWF date.

5. If the withdrawal date under FSWF / CASWF falls on a non-businessday the next Business Day will be considered for this purpose.

6. A request for SWP will be treated as a request for Redemption fromthe Scheme, at the applicable NAV, subject to applicable Load.

Investors can enrol themselves for the facility by submitting the duly

completed SWP Enrolment Form at any of the ISC. Please refer the

Enrolment Form for detailed terms and conditions of SWP.

SWP is available to investors on the commencement of ongoing Sale

and Redemption of the Units under the Scheme after the New Fund

Offer Period.

Switching Facility

On an on-going basis, the Unitholders have the option to switch all or part oftheir investment from the Scheme to any of the other scheme(s) offered bythe Mutual Fund, which is available for investment at that time, subject toapplicable Load structure of the respective schemes. Unitholders also havethe option of switching into the Scheme from any other schemes or switchingbetween various Options of the Scheme. To effect a switch, a Unitholdermust provide clear instructions. A request for a switch may be specifiedeither in terms of a rupee amount or in terms of the number of Units of theScheme from which the switch is sought. Where a request for a switch isfor both, amount and number of Units, the amount requested will be

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considered as the definitive request. Such instructions may be provided inwriting and lodged on at any of the Investor Service Centres / DesignatedCollection Centres. An Account Statement / Transaction Confirmationreflecting the new holdings will be despatched to the Unitholders normallywithin 3 Business Days of acceptance of the request for the Scheme.

The switch will be effected by redeeming Units from the Plan(s) / Option(s)of the Scheme in which the Units are held and investing the net proceeds inthe other Plan(s) / Option(s) of the Scheme, subject to the minimum balance,minimum application amount and Subscription / Redemption criteriaapplicable for the respective Scheme(s). A request for switch will be treatedas a request for Redemption from / Subscription into the respective options /Plans of the Schemes, at the Applicable NAV, subject to applicable Load, ifany.

A switch by NRI / FII Unitholders will be subject to relevant laws, rules,regulations at the time of switch.

The AMC reserves the right to charge different (including zero) Load onApplicable NAV on switchover as compared to the repurchase as the casemay be.

During the New Fund Offer Period of the Scheme, unitholders of the Fundhave the option to switch-in, all or part of their investment from any otherscheme of the Fund to this Scheme. The switch-out will be effected at theApplicable NAV of the respective (switch-out) Scheme (subject to applicablecut-off time and applicable load), on the day of acceptance of the switchingrequest. The switch-in will be effected at the New Fund Offer Price. Switchrequest will be subject to applicable exit load of the relevant scheme. Duringthe New Fund Offer Period, no Entry Load is payable for switch-in from anyequity scheme of the Mutual Fund into the Scheme. All switch requestsduring the New Fund Offer Period of the Scheme will have to be submittedat the Official Points of Acceptance of Transactions. Switch requests receivedat any other centres are liable to be rejected.

Switch-out from the Scheme is available to investors on the commencementof ongoing Repurchase / Redemption of the Units under the Scheme afterthe New Fund Offer Period. Please refer 29 for procedure of Redemption/Repurchase of units.

WHO CAN INVEST ?

The following persons are eligible and may apply for Subscription to theUnits of the Scheme (subject to wherever relevant, to purchase the Unitsof mutual funds being permitted under respective constitutions and relevantstatutory regulations) :

1. Resident adult individuals either singly or jointly (not exceeding three)or on an Anyone or Survivor basis;

2. Minors through parent / legal guardian;

3. Karta of Hindu Undivided Family (HUF);

4. Partnership Firms;

5. Companies, Bodies Corporate, Public Sector Undertakings, Associationof Persons or Bodies of Individuals (whether incorporated or not) andSocieties registered under the Societies Registration Act, 1860;

6. Banks & Financial Institutions;

7. Mutual Funds registered with SEBI;

8. Religious and Charitable Trusts, Wakfs or endowments of private trusts(subject to receipt of necessary approvals as required) and Private trustsauthorised to invest in mutual fund schemes under their trust deeds &applicable statutory law;

9. Non-resident Indians (NRIs)/Persons of Indian Origin residing abroad(PIO) either on repatriation basis or non-repatriation basis;

10. Foreign Institutional Investors (FIIs) on repatriation basis;

11. Army, Air Force, Navy and other paramilitary units and bodies createdby such institutions;

12. Scientific and Industrial Research Organisations;

13. Multilateral Funding Agencies approved by the Government of India/Reserve Bank of India;

14. Schemes of ABN AMRO Mutual Fund subject to the conditions andlimits prescribed by the SEBI Regulations;

15. Trustee, AMC, Sponsor and their associates may subscribe to Unitsunder this Scheme;

16. Such other individuals/institutions/body corporate etc., as may bedecided by the AMC from time to time, so long as wherever applicablethey are in conformity with the SEBI Regulations.

The Mutual Fund reserves the right to include / exclude new / existingcategories of investors to invest in the Scheme from time to time, subjectto the SEBI Regulations and other prevailing statutory regulations, if any.

WHO CANNOT INVEST ?

It should be noted that the following persons cannot invest in the Scheme(s):

1. Any person who is a Foreign national.

2. Overseas Corporate Bodies (OCBs) shall not be allowed to invest inthe Scheme. These would be firms and societies, which are held directlyor indirectly but ultimately to the extent of at least 60% by NRIs andtrusts in which at least 60% of the beneficial interest is similarly heldirrevocably by such persons (OCBs).\

3. Non-Resident Indians residing in the United States of America andCanada.

The Fund reserves the right to include / exclude new / existing categories ofinvestors to invest in the Scheme from time to time, subject to SEBIRegulations and other prevailing statutory regulations, if any.

Note:

1. RBI has vide Schedule 5 of the Foreign Exchange Management(Transfer or Issue of Security by a Person Resident Outside India)Regulations, 2000, granted a general permission to NRIs / Persons ofIndian Origin residing abroad (PIOs) and FIIs for purchasing/ redeemingUnits of the mutual funds subject to conditions stipulated therein.

2. Returned cheques are liable not to be presented again for collection,and the accompanying application forms are liable to be rejected. Incase the returned cheques are presented again, the necessary chargesare liable to be debited to the investor.

3. No request for withdrawal of application made during the New FundOffer Period will be entertained.

HOW TO APPLY ?

1. The application form for the Sale of Units of the Scheme will be availableand accepted at the office of the Collection Centres / ISCs given in theinside back cover of the Offer Document.

2. All switch requests during the New Fund Offer Period of the Schemewill have to be submitted at the Official Points of Acceptance ofTransactions. Switch requests received at any centres are liable to berejected. The switch will be effected at the Applicable NAV (subject toapplicable cut-off time and applicable load), for the day of acceptanceof the switching request.

3. Applications must be completed in Block Letters in English.

4. Signatures should be in English or in any Indian Language.

5. All cheques and bank drafts must be drawn in favour of the Schemeand crossed “A/c Payee only”. For e.g. “ABN AMRO Future LeadersFund”. A separate cheque or bank draft must accompany eachapplication. Investors must use separate application forms for investingsimultaneously in Option(s) of the Scheme subject to the MinimumApplication Amounts under each Option.

6. All cheques and bank drafts accompanying the application form shouldcontain the application form number on its reverse.

7. As per the directives issued by SEBI, it is mandatory for applicantsto mention their Bank Account number in their Subscription /Redemption request. Any application form without these details shallnot be accepted.

8. It is mandatory for investors making a payment of an amount of Rs.50,000 or more, to the Mutual Fund for purchase of its units, to furnishPAN alongwith a copy of a document, evidencing the PAN (i.e. PANCard / Refund Order / Assessment Order / any correspondence fromthe Income Tax Authority). Further the investors should also note thefollowing:

(a) If the application is being jointly made with other co-applicants,the PAN for each of the co-applicants should be furnished along-with a copy of a document, evidencing the PAN for each of theco-applicant.

(b) Where the person making an application is a minor and does nothave any income chargeable to income tax, he shall quote thePAN of the guardian, along-with a copy of the document,evidencing the PAN.

(c) In case the investor / co-applicant / guardian does not have a PAN,a declaration in Form 60 / 61 specified in the Income Tax Rules,giving the particulars of each transaction will have to be attachedalong-with the application.

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Applications without this information and documents will be deemedto be incomplete and liable to be rejected. Further, applications, wherethe details of the documents submitted as evidence for PAN does notmatch with the applicants / existing information available with ABNAMRO Mutual Fund, will be rejected.

9. In case of an application under a Power of Attorney, the applicationshould be accompanied by an original Power of Attorney or by a dulynotarised copy of the Power of Attorney. The Mutual Fund / Trustee /AMC reserves the right to reject the application forms not accompaniedby a Power of Attorney. Further, the Mutual Fund / Trustee / AMCreserves the right to hold Redemption / Repurchase proceeds in casethe requisite documents are not submitted.

10. For applications by a company, body corporate, eligible institutions,registered society, trusts, partnership or other eligible non-individualswho apply in the Scheme should furnish a certified copy of resolutionor authority to make the application as the case may be and a certifiedcopy of the Memorandum and Articles of Association and / or bye-laws and / or Trust Deed and / or Partnership Deed and certificate ofregistration or any other document as the case may be. In case of atrust / fund, it shall submit a certified true copy of the resolution fromthe trustee(s) authorising such Subscriptions and Repurchase /Redemptions. The authorised officials should sign the application undertheir official designation. A list of specimen signatures of the authorisedofficials, duly certified / attested should also be attached to theApplication Form.

11. Applications not complete in any respect are liable to be rejected.Applications not specifying the Scheme / Option and/or accompaniedby cheque / demand drafts / account to account transfer instructionsfavouring the Scheme / Option other than that specified in theapplication are liable to be rejected.

12. Application form without the details mentioned in Instruction 7, 8 & 11will not be accepted by the mutual fund. If accepted due to oversight,the same would be liable to be rejected within a reasonable period oftime and given back to the investor/s.

13. The AMC / Trustee retains the sole and absolute discretion to rejectany application.

MODE OF PAYMENT

Resident Investors

(a) For Investors having a bank account with such banks with whom theAMC would have an arrangement from time to time:

Payment may be made for Subscription to the Units of the Schemeeither by issuing a cheque drawn on such banks or by giving a debitmandate to their account with any branch of such banks with whomthe AMC would have an arrangement from time to time.

(b) For other Investors not covered by (a) above:

Payment may be made by cheque or bank draft drawn on any bank,which is situated at and is a member of the Bankers’ Clearing House,located at the place where the application is submitted. No cash,money orders, outstation cheques, post dated cheques (exceptfor Systematic Investment Plans) and postal orders will be accepted.Bank charges for outstation demand drafts will be borne by the AMCand will be limited to the bank charges levied by State Bank of India , ifa demand draft issued by a bank in a place where there is no ISC /Collection Centre provided for the investors. In all other cases, theAMC will not accept any request for refund of demand draft charges.

NRIs, FIIs

(a) Repatriation Basis

u In the case of NRIs/PIOs, payment may be made either by inwardremittance through normal banking channels or out of funds held inhis / her Non – Resident (External) Rupee Account (NRE) / ForeignCurrency (Non-Resident) Account (FCNR).

u FIIs shall pay their Subscription either by inward remittance throughnormal banking channels or out of funds held in Foreign CurrencyAccount or Non-Resident Rupee Account maintained with thedesignated branch of an authorised dealer in accordance with therelevant exchange management regulations.

Provided that the FII shall restrict allocation of its total investmentbetween equity and debt instruments (including dated GovernmentSecurities and Treasury Bills in the Indian capital market) in the ratio of70:30.

(b) Non-repatriation Basis

In the case of NRIs seeking to apply for units on a non-repatriationbasis, payment may be made either by inward remittance through

normal banking channels or out of funds held in his / her NRE / FCNR /Non-Resident Ordinary Rupee Account (NRO).

CHEQUE BOUNCING

In cases where the cheque(s) given by the investor for the application madeby him/her in the Scheme, are bounced (i.e. not realised) on presentation tothe Bank on which it is drawn, the AMC/Trustee/Mutual Fund reserves theright to reject the application and also restrain the said investor from makingany further investment in any of the Schemes of the Mutual Fund. TheAMC/Trustee/Mutual Fund will not be responsible in any manner whatsoeverfor any losses / damages caused to the investor as result of the AMC/Trustee/Mutual Fund rejecting the application on the basis of cheque bouncing andalso for restraining the investor from making any further investment in anyof the Schemes of the Mutual Fund.

The investor / unitholder shall indemnify the AMC/ Trustee/ Mutual Fund atall times and keep the AMC / Trustee / Mutual Fund indemnified and saveharmless against any and all claims, losses, damages, costs, liabilities andexpense (including without limitation, interest and legal fees) actuallyincurred, suffered or paid by the AMC / Trustee / Mutual Fund (directly orindirectly) and also against all demands, actions, suits proceedings made,filed, instituted against the AMC / Trustee / Mutual Fund (by the investor orany third party), in connection with or arising out of or relating to the AMC/Trustee / Mutual Fund rejecting the application of the investor on the basisof cheque bouncing and/or also for restraining the investor from making anyfurther investment in any of the Schemes of the Mutual Fund.

MASTER ACCOUNT / FOLIO

As an investor friendly measure, unless otherwise requested by theUnitholder, one Master Account / Folio Number will be assigned for oneUnitholder having holdings in different schemes of the Mutual Fund. In sucha case, one consolidated Account Statement will be provided. The numberof Units allotted to a Unitholder or Redeemed will be reflected in his or heraccount and a statement to this effect will be issued to the Unitholder. TheTrustee / AMC reserves the right to assign the existing Master Account/Folio Number against multiple applications and/or subsequent purchasesunder a new application form by an existing Unitholder, with identical modeof holding and address.

ACCOUNT STATEMENT

An Account Statement will be sent by ordinary post / courier / email notlater than 30 Business Days from the close of the New Fund Offer Period.The Account Statements shall be non-transferable. Also, an AccountStatement reflecting the net balance of the Unitholder will be mailed to theUnitholder by ordinary post /courier / email after every financial transactionis effected, except in exceptional circumstances. The Account Statementshall not be construed as a proof of title and is only a computer-printedstatement indicating the details of transactions under the Scheme.

Under normal circumstances on an on-going basis, an Account Statementreflecting the holdings will be despatched to the Unitholders normally within3 Business Days of acceptance of the valid request for the Scheme. Providedthat the Mutual Fund / Trustee / AMC reserves the right to reverse thetransaction of crediting Units in the Unitholder’s account, in the event ofnon-realisation of any cheque or other instrument remitted by the investor.

UNIT CERTIFICATES

Normally no Unit certificates will be issued. However, if the applicant sodesires, the AMC shall issue a non-transferable Unit certificate to theapplicant within 6 weeks of the receipt of request for the certificate. Unitcertificate if issued must be duly discharged by the Unitholder(s) andsurrendered to the Mutual Fund alongwith the request for Redemption/Repurchase / Switch-out or any other transaction of Units covered therein.

HOUSEHOLDINGS

In case newsletters are sent to each Unitholder by post / courier which mayresult in certain households with one or more members as the Unitholdersof the Scheme getting multiple copies. In such cases the AMC will cull thedatabase and send each such “household” a single newsletter. The AMCfeels that this will not inconvenience the Unitholders. In case it does theUnitholder can write to the AMC, for additional copies.

MODE OF HOLDING

The applicants can specify the ‘mode of holding’ in the Application Form as“Single” or “Jointly” or “Anyone or Survivor”.

In the event the account has more than one registered holder, the first-named Unitholder (as determined by reference to the original ApplicationForm) shall receive the account statements, all notices and correspondencewith respect to the account, as well as the proceeds of any Redemptionrequests or dividends or other distributions. In addition, such holder shallhave the voting rights, as permitted, associated with such Units as per theapplicable guidelines.

In the case of holding specified as ‘Jointly’, Redemptions/ Repurchase /Switch requests would have to be signed by all joint holders. However, in

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cases of holding specified as ‘Anyone or Survivor’, any one of the Unitholderswill have the power / authority to make Redemption/ Repurchase / Switchrequests, without it being necessary for all the Unitholders to sign. However,in all cases, the proceeds of the Redemption / Repurchase will be paid tothe first-named of such remaining Unitholders.

In case of death / insolvency of any one or more of the persons named inthe Register of Unitholders as the joint holders of any Units, the AMC shallnot be bound to recognise any person(s) other than the remaining holders.In all such cases, the proceeds of the Redemption will be paid to the first-named of such remaining Unitholders.

NOMINATION FACILITY

Pursuant to Regulation 29A of the SEBI Regulations, the AMC is providingan option to the Unitholder to nominate (in the manner prescribed underthe SEBI Regulations), a person in whom the Units held by him shall vest inthe event of his death. Where the Units are held by more then one personjointly, the joint Unitholders may together nominate a person in whom allthe rights in the Units shall vest in the event of death of all the jointUnitholders. By provision of this facility the AMC is not in any way attemptingto grant any rights other than those granted by law to the nominee. Anomination in respect of the Units does not create an interest in the propertyafter the death of the Unitholder. The nominee shall receive the Units onlyas an agent and trustee for the legal heirs or legatees as the case may be. Itis hereby clarified that the nominees under the nomination facility providedherein shall not necessarily acquire any title or beneficial interest in theproperty by virtue of this nomination.

The nomination can be made only by individuals applying for / holding Unitson their own behalf singly or jointly. Non-individuals including society, trust,body corporate, partnership firm, Karta of Hindu Undivided Family, holder ofPower of Attorney cannot nominate.

Only one person per folio can be nominated. A minor can be nominated andin that event, the name and address of the Guardian of the minor Nomineeshall be provided by the Unitholder. Nomination can also be in favour of theCentral Government, State Government, a local authority, and any persondesignated by virtue of his office or a religious or charitable trust.

The Nominee shall not be a trust other than a religious or charitable trust,society, body corporate, partnership firm, Karta of Hindu Undivided Familyor a Power of Attorney holder. A non-resident Indian can be a Nomineesubject to the exchange controls in force from time to time. Units will betransmitted in favour of the nominee only after the death of all existingUnitholders.

Nomination in respect of the Units stands rescinded upon the Redemption/Repurchase /transfer of Units. Cancellation of nomination can be made onlyby those individuals who hold Units on their own behalf singly or jointly andwho made the original nomination. On cancellation of the nomination shallstand rescinded and the Mutual Fund, the Trustee and the AMC shall not beunder any obligation to transmit the Units in favour of the nominee.

The nomination facility extended under the Scheme is in accordance withthe SEBI Regulations and subject to other applicable laws. Transmission ofthe Units in the name of the nominee shall discharge the Mutual Fund, theTrustee and the AMC from any liability towards the successor(s)/heir(s) ofthe deceased Unitholder(s). However, the Mutual Fund / Trustee / AMCmay request the nominee to execute suitable indemnities in favour of theMutual Fund and / or the Trustee and / or the AMC, and to submit necessarydocumentation to the satisfaction of the Mutual Fund before transmittingUnits to his / her favour. Nominations received in the form prescribed by theAMC alone shall be valid.

Further, if either the Mutual Fund and/or the Trustee and/or the AMC incurany loss whatsoever arising out of any litigation or harm that it may suffer inrelation to the nomination, they will be entitled to be indemnified absolutelyfrom the deceased Unitholders’ estate.

Investors / Unitholders are advised to read the instructions carefully beforenominating.

TRANSFER & TRANSMISSION FACILITY

The Mutual Fund will be repurchasing Units on an ongoing basis and hencethe transfer facility is found redundant. However, if a person becomes aholder of the Units by operation of law or upon enforcement of a pledge,then the AMC shall, subject to production of such evidence, which in theiropinion is sufficient, proceed to effect the transfer, if such person is otherwiseeligible to hold the Units.

Any addition / deletion of name from the folio of the Unitholder is deemedas transfer of Units. In view of the same, additions / deletions of names willnot be allowed under any folio of the Scheme. The said provisions in respectof deletion of names will not be applicable in case of death of a Unitholder(in respect of joint holdings) as this is treated as transmission of Units andnot transfer.

A person becoming entitled to hold the Units in consequence of the death,insolvency, or winding up of the sole holder or the survivors of joint holders,

upon producing evidence and documentation to the satisfaction of the MutualFund and/or the Trustee and/or the AMC and upon executing suitableindemnities in favour of the Mutual Fund and/or the Trustee and/or the AMC,shall be registered as a Unitholder.

LIEN ON UNITS

In case the Subscription money is not realized, the transaction shall bereversed and the Units allotted (if any) shall be cancelled, and a fresh AccountStatement/ Confirmation slip shall be dispatched to the Unitholder. For Non-Individuals and NRI’s the Mutual Fund may mark a lien on Units in casedocuments, which need to be submitted, are not given in addition to theapplication form before the submission of Redemption / Repurchase request.

However, the Trustee / AMC reserves the right to change operationalguidelines for lien on Units from time to time.

PLEDGE OF UNITS

The Units under the Scheme may be offered as security by way of a pledge /charge in favour of scheduled banks, financial institutions, non-bankingfinance companies (NBFCs) or any other institution, subject to any rules /restrictions that the AMC may prescribe from time to time. The ISC willnote and record such pledged / charged Units. A standard form for thispurpose is available on request from any of the ISCs. The ISC shall mark alien only upon receiving the duly completed form and documents as it mayrequire. Disbursement of such loans will be at the entire discretion of thebank / financial institution / NBFC or any other body concerned and theMutual Fund assumes no responsibility thereof. The Trustee / AMC retainsthe sole and absolute discretion to reject any application for pledge of units.

The Unitholder will not be able to redeem/switch Units that are pledged/charged until the entity to which the Units are pledged/charged provideswritten authorisation to the Mutual Fund that the lien may be removed. Aslong as Units are pledged / charged, the Pledgee / Chargeholder will havecomplete authority to redeem such Units. The AMC reserves the right todiscontinue this facility.

SALE OF UNITS ON AN ONGOING BASIS

The Scheme will offer for Sale of Units on every Business Day on an ongoingbasis commencing from not later than 30 days from the closure of NewFund Offer Period. Units of the Scheme would be available at ApplicableNAV, subject to the applicable Sales Load, if any, on any Business Day fromthe ISCs given in the inside back cover of the Offer Document.

Subscriptions on an ongoing basis will be made only by specifying the amountto be invested and not the number of Units to be subscribed. The totalnumber of Units allotted will be determined with reference to the applicableSale Price and fractional Units may be created. Fractional Units will becomputed and accounted for upto three decimal places and they will in noway affect an investor’s ability to redeem Units. The Trustee / AMC reservesthe right to change the basis for Subscription from amount basis to anyother basis.

ONGOING SALE PRICE

The Sale Price of the Units on an ongoing basis is based on the ApplicableNAV and Sales Load, if any.

The Sale Price per Unit will be calculated using the following formula:

Sale Price = Applicable NAV x (1 + Entry Load, if any)

Illustration for calculation of Sale Price:

If the Applicable NAV is Rs. 10.00; Entry Load is 2 percent, then the SalePrice will be calculated as follows :

= Rs. 10.00 x (1+0.02)

= Rs. 10.00 x (1.02)

= Rs. 10.200

As per SEBI Regulations, while determining the prices of the units, theMutual Fund shall ensure that the Repurchase Price is not lower than 93%of the Net Asset Value and the Sale Price is not higher than 107% of theNet Asset Value. Provided further that the difference between the repurchaseprice and the sale price of the unit shall not exceed 7% calculated on thesale price.

APPLICABLE NAV FOR SALE OF UNITS

Applicable NAV in respect of an application for Sale which is received upto3.00 p.m. on a Business Day (subject to it being complete in all respects)will be the NAV of the respective Option as at the close of that BusinessDay, subject to Sales Load, if any. When an application for Sale is receivedafter the cut off time specified above or on a Non-Business Day, the requestwill be deemed to have been received on the next Business Day subject toit being complete in all respects. Please refer to “Right to Limit / WithholdRedemptions” on page 30 and “Suspension of Sale / Redemption / SwitchingOptions of the Units” on page 30.

However, in respect of valid applications accompanied with demand drafts,which is not payable at par at the place where the application is received, ifaccepted as a mode of payment, the closing NAV of the Business Day on

29


which demand draft is credited into the account of ABN AMRO MutualFund shall be applicable.

REDEMPTION OF UNITS

The Units can be redeemed (i.e. sold back to the Mutual Fund) on or Switchedout (i.e. to another scheme of the Mutual Fund or Option(s) offered withinthe Scheme, if any) every Business Day, at the Applicable NAV subject toapplicable CDSC & Exit Load, if any.

In case an investor has purchased Units on more than one Business Day(either under the New Fund Offer Period or through subsequent purchases)the Units purchased first (i.e. those Units which have been held for thelongest period of time), will be deemed to have been redeemed first i.e. ona First-in-First-Out basis. This would be applicable for SWP as well.

It may, however, be noted that in the event of death of the Unitholder, thenominee/legal heir (as the case may be), subject to production of requisitedocumentary evidence, will be able to redeem the investment.

The Redemption request can be made on a pre-printed form or by using therelevant tear off section of the Transaction Slip enclosed with the AccountStatement, which should be submitted at/may be sent by mail to the ISCsgiven in the inside back cover of the Offer Document.

In case the Units are held in the names of more than one Unitholder, wheremode of holding is specified as “Joint”, Redemption requests will have tobe signed by all the joint holders. However, in cases of holding specified as“Anyone or Survivor”, any of one the Unitholders will have the power /authority to make Redemption request, without it being necessary for allthe Unitholders to sign. However, in all cases, the Redemption proceedswill be paid only to the first named of such remaining Unitholder.

MINIMUM AMOUNT / UNITS FOR REDEMPTION

The Redemption would be permitted to the extent of credit balance in theUnitholder’s account. The Redemption request can be made by specifyingthe rupee amount or by specifying the number of Units of the Scheme tobe redeemed. If a Redemption request is for both, a specified rupee amountand a specified number of Units of the Scheme, the specified number ofUnits will be considered the definitive request. If the Unitholder specifiesonly the Redemption amount, the AMC will divide the Redemption amountso specified by the Redemption Price to arrive at the number of Units. Therequest for Redemption of Units could also be in fractions, upto three decimalplaces.

The minimum amount of Units for Redemption / Switch out for the Schemeis Rs.1000 or a minimum of 100 Units ( unless redmeption request is for allunits).

The investor is entitled to redeem the entire balance of his Units held in theScheme, regardless of the minimum amount / Units mentioned above. Theminimum amount of Redemption may be changed in future by the Trustee /AMC for the Scheme. If the balance in the account of the Unitholder doesnot cover the amount of Redemption request, then the Mutual Fund isauthorised to close the account of the Unitholder and send the entire such(lesser) balance to the Unitholder.

Investors are requested to note that as per the prevailing tax laws, Unitholders would be liable to pay securities transaction tax during repurchaseof their units under the Scheme. The Redemption price / units will becalculated taking into account the said transaction tax.

REDEMPTION PRICE

The Redemption Price of the Units, on an ongoing basis, is based on theApplicable NAV and subject to applicable CDSC and Exit Load, if any.

The Redemption Price will be calculated using the following formula:

Redemption Price = Applicable NAV x (1 - Exit Load, if any)

Example for calculation of Redemption Price:

If the Applicable NAV is Rs.15 and a 2% Exit Load is charged, the RedemptionPrice will be calculated as follows:

= Rs.15 x (1-0.02)

= Rs.15 x (0.98)

= Rs.14.700

As per SEBI Regulations, while determining the prices of the units, theMutual Fund shall ensure that the Repurchase Price is not lower than 93%of the Net Asset Value and the Sale Price is not higher than 107% of theNet Asset Value. Provided further that the difference between the repurchaseprice and the sale price of the unit shall not exceed 7% calculated on thesale price.

APPLICABLE NAV FOR REDEMPTION OF UNITS

Applicable NAV in respect of an application for Redemption which is receivedbefore 3.00 p.m. on a Business Day (subject to it being complete in allrespects) will be the NAV of the respective Option as at the close of thatBusiness Day, subject to applicable CDSC and Exit Load, if any. When an

application for Redemption is received after the cut off time specified aboveor on a Non-Business Day, then the request will be deemed to have beenreceived on the next Business Day subject to it being complete in all respects.Please refer to “Right to Limit / Withhold Redemptions” on page 30 and“Suspension of Sale / Redemption / Switching Options of the Units” onpage 30.

PAYMENT OF REDEMPTION PROCEEDS

(a) Unitholders having a bank account with certain banks with whom theAMC would have an arrangement from time to time, the Redemption/ dividend proceeds shall be directly credited to their account. As perthe SEBI Regulations, the Mutual Fund shall despatch Redemptionproceeds within 10 Business Days from the date of acceptance of theRedemption request. However, under normal circumstances, theMutual Fund will endeavour to credit the first/sole Unitholder’s accountwith the Redemption proceeds within 3 Business Days from the dateof acceptance of the Redemption request.

(b) For other Unitholders not covered by (a) above and Unitholders coveredby (a) but have given specific request for Cheque :

Redemption proceeds will be paid by cheque and payments will bemade in favour of the Unitholder (registered holder of the Units or, ifthere is more than one registered holder, only to the first registeredholder) with bank account number furnished to the Mutual Fund.Redemption proceeds will be sent to the Unitholders address (or, ifthere is more than one holder on record, the address of the first-namedUnitholder).

As per the SEBI Regulations, the Mutual Fund shall despatchRedemption proceeds within 10 Business Days from the date ofacceptance of the Redemption request. However, under normalcircumstances, the Mutual Fund will endeavour to despatch theRedemption proceeds within 3 Business Days from the date ofacceptance of the Redemption request.

BANK DETAILS

In order to protect the interest of Unitholders from fraudulent encashmentof cheques, the current SEBI Regulations, has made it mandatory forinvestors to mention in their Application / Redemption request, their bankname and account number. Any application form without these details shallnot be accepted. The normal processing time may not be applicable insituations where such details are not provided by Investors / Unitholders.The AMC will not be responsible for any loss arising out of fraudulentencashment of cheques and / or any delay / loss in transit.

REDEMPTION BY NRIs / FIIs

RBI has vide Schedule 5 of the Foreign Exchange Management (Transfer orIssue of Security by a Person Resident Outside India) Regulations, 2000,granted general permission to NRIs and FIIS who have purchased unitsissued by mutual funds, to tender units to the mutual funds for repurchaseor for the payment of maturity proceeds. Payment of Redemption proceedsto NRIs / FIIs Unitholders will be subject to the relevant rules/regulations /guidelines of RBI as are applicable from time to time (subject to deductionof tax at source as applicable).

(a) Units purchased on Non-Repatriation basis

The Redemption proceeds shall be credited to the NRI investor’s NROaccount, where the payment for the purchase of the Units redeemed wasmade out of funds held in NRO account

(b) Units purchased on Repatriation basis

(i) In the case of NRI the Redemption proceeds shall be remitted abroador at the NRI investor’s option, credited to the NRE / FCNR accountwhere the payment for the purchase of Units redeemed was made byinward remittance through normal banking channels or out of fundsheld in NRE / FCNR account.

(ii) In the case of FIIs, the Redemption proceeds shall be remitted abroador credited to the Non-Resident Rupee Account of the FII maintainedwith the designated branch of an authorised dealer in accordance withthe relevant exchange management regulations.

IDENTIFICATION DOCUMENTS

The requisite identification documents should be submitted along-with theapplication form for subscription of units such as certified copy of resolution,list of authorised signatories, a certified copy of the Memorandum & Articlesof Association and / or bye-laws and / or Trust Deed and / or PartnershipDeed and certificate of registration or any other document, as the case maybe, then the same shall be submitted by the said investor along-with theapplication. In case where the required documents are not submitted bythe investor at the time of making the application, the AMC/Trustee/MutualFund reserves the right to withhold the redemption request / reject theapplication of the said investor till the required documents are received bythe AMC/Trustee/Mutual Fund/its Agents from the said investor. The AMC/Trustee/Mutual Fund shall not be responsible in any manner whatsoever for

30



any losses/damages caused to the investor as result of the AMC/Trustee/Mutual Fund/its Agents withholding the redemption request of the saidinvestor till the required documents are received by the AMC/Trustee/MutualFund from the said investor.

EFFECT OF REDEMPTIONS

The Unit capital and reserves will stand reduced by an amount equivalent tothe product of the number of Units redeemed at the Applicable NAV. Unitsonce redeemed will be extinguished and will not be re-issued.

RIGHT TO LIMIT / WITHHOLD REDEMPTION

The Trustee / AMC may, in the general interest of the Unitholders of theScheme, keeping in view the unforeseen circumstances / unsure conditions,limit the total number of Units which may be Redeemed on any BusinessDay to 5% of the total number of Units then in issue under the Scheme (orsuch higher percentage as the Trustee / AMC may decide in any particularcase). In addition, the Trustee / AMC reserves the right, in its sole discretion,to limit Redemptions with respect to any single account to an amount ofRs. 2 crore or such other lower / higher amount decided by the Trustee /AMC, on a single Business Day. Any Units which by virtue of these limitationsare not Redeemed on a particular Business Day will be carried forward forRedemption to the next Business Day, in order of receipt. Redemptions socarried forward will be priced on the basis of the Redemption Price of theBusiness Day on which Redemption is made. Under such circumstances,to the extent multiple Redemption requests are received at the same timeon a single Business Day, Redemption will be made on pro-rata basis, basedon the size of each Redemption request, the balance amount being carriedforward for Redemption to the next Business Day(s).

In case a Unitholder makes a Redemption request immediately afterSubscription of Units, the Redemption proceeds will not be dispatched untilSubscription moneys are realized by the Mutual Fund and the proceedshave been credited to the Scheme’s Account. However, this is only applicableif the value of Redemption is such that some or all of the freshly purchasedUnits may have to be redeemed to effect the full Redemption.

FREEZING / SEIZURE OF ACCOUNTS

Investors may note that under the following circumstances the Trustee /AMC may at its sole discretion (and without being responsible and/or liablein any manner whatsoever) freeze/seize a Unitholder’s account (or deal withthe same in the manner the Trustee / AMC is directed and/or ordered) undera Scheme:

u Under any requirement of any law or regulations for the time being inforce.

u Under the direction and/or order (including interim orders) of anyregulatory/statutory authority or any judicial authority or any quasi-judicialauthority or such other competent authority having the powers to givedirection and/or order.

IMPORTANT NOTE ON ANTI MONEY LAUNDERING,KNOW-YOUR-CUSTOMER AND INVESTOR PROTECTION

The investors should ensure that the amount invested in the scheme isthrough legitimate sources only and does not involve and are not designedfor the purpose of any contravention or evasion of any Act, Rules,Regulations, Notifications or Directions of the provisions of Income Tax Act,Anti Money Laundering Act, Anti Corruption Act and or any other applicablelaws enacted by the Government of India from time to time.

Anti Money Laundering: The AMC is committed to complying with allapplicable anti money laundering law and regulation in all of its operations.The AMC recognises the value and importance of creating a businessenvironment that strongly discourages money launderers from using themutual funds route. To that end, certain policies have been adopted by theAMC.

Know Your Customer (KYC): The need to “Know Your Customer” is vitalfor the prevention of money laundering. The AMC may seek information orobtain and retain documentation used to establish identity. It may re-verifyidentity and obtain any missing or additional information for this purpose.

The AMC, under powers delegated by the Trustee, shall have absolutediscretion to reject any application, prevent further transactions by a UnitHolder, if after due diligence, the investor / Unit Holder / a person makingthe payment on behalf of the investor does not fulfil the requirements ofthe “Know Your Customer” or the AMC believes that the transaction issuspicious in nature as regards money laundering. In this behalf the AMCreserves the right to reject any application and effect a mandatoryRedemption of Units allotted at any time prior to the expiry of 30 BusinessDays from the date of the application.

To ensure appropriate identification of the investor and with a view to monitortransactions for the prevention of money laundering, the AMC reserves theright to: (a) scrutinise and verify the identity of the investor, unit holder,person making the payment on behalf of the investor and the source of thefunds invested, to be invested in the Mutual Fund; (b) reject any application,prevent further transactions by a unit holder; (c) to mandatorily redeem theunits held by the unit holder at the applicable NAV prevalent at the time ofsuch redemption and (d) reject the transaction / redemption / freeze or seizeUnitholder’s account if the AMC has a reasonable ground to do so.

The AMC may share investor’s personal information with any organisationfor compliance with any legal or regulatory requirements or to verify theidentity of investors for complying with anti-money laundering requirements.

CLOSURE OF UNITHOLDERS’ ACCOUNT / MANDATORYREDEMPTION OF UNITS

Investors may note that the Trustee / AMC at its sole discretion may closea Unitholder’s account under the Scheme after giving notice of 30 days, ifat the time of any part Redemption, the value of balance Units (representedby the Units in the Unitholder’s account if such Redemption / Switch wereto take place, valued at the Applicable NAV), falls below an amount ofRs. 5,000 /- or such other amount determined by the AMC / Trustee fromtime to time.

As Units may not be held by any person in breach of the SEBI Regulations,any law or requirements of any governmental, statutory authority including,without limitation, exchange control regulations, the Mutual Fund / Trustee /AMC may mandatorily redeem all the Units of any Unitholder where theUnits are held by a Unitholder in breach of the same.

The Mutual Fund / Trustee / AMC may redeem Units of any Unitholder inthe event it is found that the Unitholder has submitted information either inthe application or otherwise that is false, misleading or incomplete.

SUSPENSION OF SALE / REDEMPTION / SWITCHING OPTIONSOF THE UNITS

The Mutual Fund at its sole discretion reserves the right to withdraw Saleand / or Redemption or Switching of the Units in the Scheme (including anyone of the Option of the Scheme) temporarily or indefinitely, if in the opinionof the Trustee / AMC the general market conditions are not favourable and /or suitable investment opportunities are not available for deployment offunds. However, the suspension of Sale / Redemption / Switching eithertemporarily or indefinitely will be with the approval of the Boards of theAMC and the Trustee. The approval from the Boards of the AMC and theTrustee giving details of circumstances and justification for the proposedaction shall also be informed to SEBI in advance.

The Sale, Redemption and Switching of the Units may be temporarilysuspended under the following conditions:

1. When one or more stock exchanges or markets, which provide basisfor valuation for a substantial portion of the assets of the Scheme areclosed otherwise than for ordinary holidays.

2. When, as a result of political, economic or monetary events or anycircumstances outside the control of the Trustee and the AMC, thedisposal of the assets of the Scheme are not reasonable, or would notreasonably be practicable without being detrimental to the interests ofthe Unitholders.

3. In the event of breakdown in the means of communication used forthe valuation of investments of the Scheme, without which the valueof the securities of the Scheme cannot be accurately calculated.

4. During periods of extreme volatility of markets, which in the opinion ofthe AMC are prejudicial to the interests of the Unitholders of theScheme or due to any changes in regulatory framework, marketdevelopment, when continuing with Sale/ Purchases/ switching mayor may not be in the interest of investors .

5. In case of natural calamities, war, strikes, riots and bandhs.

6. In the event of any force majeure or disaster that affects the normalfunctioning of the AMC or the ISC or Registrar and Transfer Agent.

7. During the period of Book Closure.

8. If so directed by SEBI.

The Trustee / AMC reserves the right in its sole discretion to withdraw thefacility of Sale and Switching Option of Units into and out of the Scheme,temporarily or indefinitely, if AMC views that changing the size of the corpusmay prove detrimental to the existing Unit holders of the Scheme. In theabove eventualities, the time limits indicated, for processing of requests forSubscription and Redemption of Units will not be applicable.

31


LOAD STRUCTURE & RECURRING EXPENSES

EXPENSES OF THE SCHEME

The information provided under this Section seeks to assist the investor in

understanding the expense structure of the Scheme, fees / expenses and

their percentage the investor is likely to incur on purchasing and selling the

Units of the Scheme.

a) Unitholder Transaction Expenses and Load (For the New Fund Offer

Period)

Particulars Regular Plan (% of NAV)

Maximum Sales Load Nil

imposed on Sale of Units

Sales Load on issue of Nil

Units in lieu of dividends ·

Contingent Deferred Contingent Deferred Sales Charge:

Sales Charge (“CDSC”) u In respect of each Subscription / Switch

- In of Units for an amount less than

Rs. 5 crores in value:

– 1.5% if units are redeemed /

switched out within and upto 6

months from the date of allotment


switched out after 6 months but

before 12 months from the date of

allotment

u In respect of each Subscription / Switch

- In of Units for an amount equal to

Rs. 5 crores in values or more:


switched out within and upto 12

months from the date of allotment

Maximum Redemption / Nil

Exit Load

Any CDSC charged to the Unitholders will be credited back to the fund

simultaneously or in such other manner as AMC may decide from time to

time.

b) Unitholder Transaction Expenses and Load (Ongoing basis)

Particulars (% of NAV)

Maximum Sales Load 7%* or such lower rate as may be notified

imposed on Purchases by AMC from time to time.

Sales Load on issue of Nil

Units in lieu of dividends

Maximum Redemption / 7%* or such lower rate as may be notified

Exit Load / CDSC by AMC from time to time.

Maximum Switch Over Fee As per prevailing Load Structure

of the Scheme

* The Mutual Fund shall ensure that the Redemption Price is not lower

than 93% of the NAV and the Sale Price is not higher than 107% of the

NAV, provided that the difference between the Redemption Price and

Sale Price of the Unit shall not exceed the permissible limit of 7% of

the Sale Price, as provided for under the SEBI Regulations.

Any CDSC charged to the Unitholders will be credited back to the fund

simultaneously or in such other manner as AMC may decide from time to

time.

The Unitholder transaction expenses and loads set forth above are subject

to change at the discretion of the AMC / Trustee and such changes shall be

implemented prospectively.

Subject to the SEBI Regulations, the AMC / Trustee reserve the right to

modify / alter the load structure and may decide to introduce a differential

load structure on the Units subscribed / redeemed on any Business Day

under each Plan(s) / Option(s). Such changes will be applicable for prospective

investments. The AMC / Trustee shall arrange to display a notice in the

Investor Service Centres of the AMC and distributors / brokers office, before

the change of the then prevalent load structure. The Addendum detailing

the changes in load structure will be attached to Offer Documents and

Abridged Offer Documents. The Addendum will also be circulated to all the

distributors / brokers so that the same can be attached to all the Offer

Documents and Abridged Offer Documents in stock. This Addendum will

also be sent along with the newsletter to the Unitholders immediately after

the changes. Changes in the load structure may be stamped in the

acknowledgement slip issued by the Mutual Fund after the changes in load

structure. The changes may also be disclosed in the Statements of Account

issued after the introduction of such load. The Load collected from the

Unitholders under each Plan / Option will be credited to a separate account

in the Scheme accounts and will be offset against selling, distribution and

marketing expenses in accordance with the SEBI Regulations. Surplus of

Load, if any, charged over planned selling, distribution and marketing

expenses to be defrayed will be credited to the Scheme whenever felt

appropriate by the AMC. Any CDSC charged to the Unitholders will be

credited back to the fund simultaneously or in such other manner as AMC

may decide from time to time.

c) Initial Issue Expenses

Under the SEBI Regulations, the Mutual Fund is entitled to charge initial

issue expenses upto a maximum of 6% of the initial resources raised under

the Scheme.

In respect of the Scheme, the following expenses are proposed to be charged

to the Scheme :

Initial Issue Expense Head (as % of Target Mobilisation)

Marketing and Advertising Expenses 2.50%

Printing and Mailing Expenses 0.35%

Commission to Agents / Brokers 2.25%

Registrars Expenses 0.20%

Bankers Fees & Other Expenses 0.70 %

Total 6.00%

The above estimates are based on the minimum subscription (target) amount

for the Scheme and are subject to change both inter-se and as an increase

or decrease as per actual.

The Mutual Fund may charge initial issue expenses upto a maximum of

6.00% of the initial resources raised under the Scheme. Initial Issue expenses

upto 4.00% of the initial resources raised will be charged to the Scheme

upfront and the balance Initial Issue expenses up to 2.00% of the initial

resources raised will be amortized over a period not exceeding one year.

The initial issue expenses in excess of the above limits shall be borne by

the AMC / Sponsor / Trustee. The AMC may decrease / withdraw the

amortisation of the initial issue expenses at any point of time.

Out of Rs.100/- (Rupees One Hundred Only) subscribed by the investor in

the Scheme in the New Fund Offer Period, the minimum amounts available

for investment by the Scheme will be as follows :

Particulars (Rs.)

(I) Subscription by the investor (Rs.) 100

(II) Sale Price 10.00

(III) Number of units allotted 10

(Rs. 100 / 10)

(IV) Amount available before charging

Initial Issue Expenses (Rs.) 100

(V) Initial Issue Expenses charged 6

to the Scheme (6%) (6%*100)

(VI) Amount available to the Scheme

for investment (Rs.) 94

SECTION IV

32



The impact on the NAV on the first day of declaration of NAV after initialsubscription as a consequence of the amortisation of initial issue expensesis illustrated below :

Subscription by the investor 100

Total number of Units Allotted 10

Total Initial Issue Expenses (Rs.) 6

Intial Issue Expenses Amortised onthe date of the first NAV 4

Maximum Period of Amortisations of balance 1 years (i.e. 365 days)

Per day amortisation ofInitial Issue Expenses (Rs.) 2/365 = 0.0055

Balance Initial Issue Expenses whichwill be included in the Net Assets (Rs.) 2 - 0.0055 = 1.9945

Nav on first date of computation (Rs.) ((100-(4 + .0055)) /10 = 9.5995

Redemption Price on first date of NAV Rs. 9.4555 ((Rs. 9.5995 -computation (Rs.) (9.5995*1.5%))

Assumptions

For illustrating the impact on NAV, no accruals, appreciation or depreciationon Investments have been assumed from the time of New Fund Offer tillthe date of computation of NAV.

u The impact of Entry/Exit load during the Continuous Offer has not beenconsidered for calculation of Purchase/ Redemption Price on first dateof NAV computation.

u Initial Issue Expenses are amortised for a period of one year.

u Amortisation of Initial Issue Expenses / Annual Recurring Expensesstarts from the date of computation of NAV, which could be earlierthan the first day of declaration of NAV.

d) Annual Scheme Recurring Expenses

The AMC has estimated the annual recurring expenses under the Schemeas per the table below :

Regular Plan

Expense Head [% per annum ofaverage daily net assets)

Investment Management and Advisory Fee 1.25%

Fees and expenses of Trustee 0.03%

Custodian Fee 0.15%

Marketing & Selling expenses including agentscommission 0.50%

Registrar & Transfer Agent Fees 0.22%

Audit Fees 0.05%

Costs of investor communication, Fundstransfer, Account Statement, Dividend, etc.and Statutory advertisement 0.10%

Such other expenses, which are directlyattributable to the Scheme, subject to theapproval of the trustee 0.20%

Total estimated recurring expenses 2.50%

The purpose of the above table is to assist the investor in understandingthe various costs and expenses that an investor in the Scheme will beardirectly or indirectly. The above expenses are subject to change and mayincrease / decrease as per actual and / or any change in the SEBI Regulationsand the AMC reserves the right to change (increase/decrease) the expensescharged to each Scheme, subject to the applicable SEBI Regulations. Asper the SEBI Regulations, the maximum recurring expenses including theinvestment management and advisory fee that can be charged to the Schemeshall be subject to a percentage limit of average daily net assets as given inthe table below. Expenses over and above the prescribed ceiling will beborne by the AMC.

First Rs. 100 Next Rs. 300 Next Rs. 300 Over Rs. 700Crores Crores Crores Crores

2.50% 2.25% 2.00% 1.75%

As per the Investment Management Agreement and the SEBI Regulations,the AMC is entitled to an Investment Management and Advisory fee at therate of 1.25% per annum of the daily average net assets outstanding ineach accounting year for the Schemes, as long as the net assets do notexceed Rs. 100 crore and 1.00% of the excess amount over Rs. 100 crore,where net assets so calculated exceed Rs. 100 crore. For Schemes launchedon a no load basis, the AMC is entitled to collect an additional managementfee not exceeding 1% of the daily average net assets outstanding in eachfinancial year. However such additional management fees shall only bechargeable till the actual initial expenses borne by the AMC, limited to themaximum extent of 6% of the initial mobilisation, are recovered.

FEES AND EXPENSES OF THE PAST SCHEMES ANDCONDENSED FINANCIAL INFORMATION

Initial Issue Expenses of the Past Schemes

Under the SEBI Regulations, the Mutual Fund is entitled to charge initialissue expenses upto a maximum of 6% of the initial resources raised underthe Schemes. The Mutual Fund has launched nine schemes in the past viz.,AAEF, AAMIP, AAFDF, AAFRF, AACF , AAOF, AADYF, AALTFRF and AATAP.

The Initial Issue expenses for AALTFRF, AAMIP, AAFDF, AAFRF and AACFwere borne by the AMC. In case of AAEF, the entry load collected duringthe initial offer period amounting to Rs. 7.58 Crores, was utilised to meetthe Initial Issue expenses incurred on selling, distribution and marketingexpenses of AAEF. The remainder of the total initial issue expenses wasborne by the AMC. The Initial Issue expenses met from the Entry Loadcollected were within 6% of the mobilisation. As the initial issue expensesin case of AALTFRF, AAEF, AAMIP, AAFDF, AAFRF and AACF were notcharged to the Schemes, the comparison of ‘actual expenses’ and ‘estimatedexpenses’ for these Schemes are not disclosed.

Expense Head [% per annum ofaverage daily net assets)

In case of AAOF and AADYF the break-up of Initial Issues Expenses charged to Scheme is as follows:

ABN AMRO Opportunities Fund ABN AMRO Dividend Yield Fund

Initial Issue Expenses Head Estimated as per Actuals Estimated as per ActualsOffer Document Offer Document

(as % of Target Mobilisation) (as % of Target Mobilisation)

Marketing and Advertising Expenses 1.00% 0.31% 1.00% 0.26%

Printing and Mailing Expenses 0.35% 0.07% 0.35% 0.07%

Additional Commission to Agents / Brokers 0.25% 1.60% 0.25% 1.65%

Registrars Expenses 0.20% 0.02% 0.20% 0.02%

Bankers Fees & Other Expenses 0.20% 0.00% 0.20% 0.00%

Total 2.00% 2.00% 2.00% 2.00%

Expenses borne by the AMC NIL NIL NIL NIL

Note:

u In case of AAOF, out of the entry load collected during the initial offer period amounting to Rs. 7.16 Crores, an amount of Rs. 5.32 Crores was utilisedto meet the Initial Issue expenses incurred on Commission to Agents/Brokers.

u In case of AADYF, out of the entry load collected during the initial offer period amounting to Rs. 5.71 Crores, an amount of Rs. 4.38 Crores was utilisedto meet the Initial Issue expenses incurred on selling and distributions expense and payment of Commission to Agents/Brokers.

u The initial issue expenses of the above schemes did not vary adversely from the estimated expenses of the Schemes, on an overall basis.

33


UNAUDITED CONDENSED FINANCIAL INFORMATION

Particulars Period Ended February 24, 2006

AACF AAFRF AAFDF AAEF AAMIP AAOF AADYF AALTFRF AATAP

NAV at the beginning of the year*

Growth – – – 13.21 10.5179 – – – –

Dividend – – – 13.23 – – – – –

Monthly Dividend – – – – 10.2337 – – – –

Quarterly Dividend – – – – 10.2156 – – – –

Regular Gorwth 10.2598 10.2605 10.1283 – – – – – –

Regular Weekly Dividend 10.0000 – – – – – – – –

Regular Monthly Dividend – 10.0030 – – – – – – –

Regular - Quarterly Dividend – – 10.0020 – – – – – –

Regular - Half Yearly Dividend – – 10.0024 – – – – – –

Instituional Growth 10.2866 10.2817 – – – – – – –

Institutional Daily Dividend 10.0000 10.0000 – – – – – – –

Institutional Monthly Dividend – 10.0036 – – – – – – –

Institutional Quarterly Dividend – – – – – – – – –

Net Income per units (Rs.) 0.3647 0.5008 0.0884 5.08 0.5260 3.874 1.233 0.3543 0.405

Dividends paid per unit

Dividend – – – 1.75 – – – – –

Regular - Monthly Dividend(Individual / HUF) (Rs. per unit) – 0.29012169 – – – – – 0.1109 –

Regular - Montlhy Dividend(Others) (Rs. per unit) 0.02858416 0.27327515 – – – – – 0.1033 –

Regular - Weekly Dividend(Individual / HUF) (Rs. per unit) 0.38682929 0.14503654 – – – – – 0.1404 –

Regular - Weekly Dividend(Others) (Rs. per unit) 0.36024305 0.15361058 0.0145 – – – – 0.1401 –

Regular - Quarterly Dividend(Individual / HUF) (Rs. per unit) – – 0.2631 – – – – – –

Regular - Quarterly Dividend(Others) (Rs. per unit) – – 0.2451 – – – – – –

Regular - Half Yearly Dividend(Individual / HUF) (Rs. per unit) – – 0.1842 – – – – – –

Regular - Half Yearly Dividend(Others) (Rs. per unit) – – 0.1715 – – – – – –

Regular Daily Dividend(Individual / HUF) (Rs. per unit) – – 0.0278 – – – – – –

Regular Daily Dividend(Others) (Rs. per unit) – – 0.0359 – – – – – –

Monthly Dividend(Individual / HUF) (Rs. per unit) – – – – 0.6316 – – – –

Monthly Dividend(Others) (Rs. per unit) – – – – 0.5878 – – – –

Quarterly Dividend(Individual / HUF) (Rs. per unit) – – – – 0.3728 – – – –

Quarterly Dividend(Others) (Rs. Per unit) – – – – 0.3471 – – – –

Institutional - Daily Dividend(individual / HUF) (Rs. per unit) 0.42926388 0.43604009 – – – – – – –

Institutional - Daily Dividend(Others) (Rs. per unit) 0.39971527 0.40728407 – – – – – – –

Institutional - Weekly Dividend(individual / HUF) (Rs. per unit) – – – – – – – 0.1296 –

Institutional - Weekly Dividend(Others) (Rs. Per unit) – – – – – – – 0.1519 –

Institutional - Monthly Dividend(individual / HUF) (Rs. per unit) – 0.31748516 – – – – – – –

Institutional - Monthly Dividend(Others) (Rs. per unit) 0.17197765 0.29910160 – – – – – 0.1224 –

Institutional Plus - Daily Dividend(individual / HUF) (Rs. per unit) 0.02584129 – – – – – – – –

Institutional Plus - Daily Dividend(Others) (Rs. per unit) 0.18167661 0.17940041 – – – – – – –

Institutional Plus - Monthly Dividend(individual / HUF) (Rs. per unit) – – – – – – – – –

Institutional Plus - Monthly Dividend(Others) (Rs. per unit) 0.14658160 – – – – – – – –

Transfer to reserves (Rs. in Lakhs) – – – – – – – – –

NAV at the end of the period

Growth – – – 21.25 11.5660 16.230 11.257 10.1698 10.963

Dividend – – – 18.39 16.253 11.259 10.963

Monthly Dividend – – – – 10.5043 – – – –

Quarterly Dividend – – – – 10.5381 – – – –

34



Regular Growth 10.7237 10.7226 10.5608 – – – – – –

Regular Daily Dividend – – 10.0001 – – – – – –

Regular Weekly Dividend 10.0014 10.0014 9.9840 – – – – 10.0015 –

Regular Monthly Dividend 10.0337 10.0351 – – – – – 10.0343 –

Regular Quarterly Dividend – – 10.1254 – – – – – –

Regular Half-yearly Dividend – – 10.2165 – – – – – –

Institutional Growth 10.8008 10.7939 – – – – – 10.1900 –

Institutional Daily Dividend 10.0000 10.0000 – – – – – – –

Institutional Weekly Dividend – – – – – – – 10.0017 –

Institutional Monthly Dividend 10.0414 10.0409 – – – – – 10.0389 –

Instituional Quarterly Dividend – – – – – – – – –

Institutional Plus Growth 10.2251 10.2223 – – – – – – –

Institutional Plus Daily Dividend 10.0000 10.0000 – – – – – – –

Institutional Plus Monthly Dividend 10.0437 – – – – – – – –

Date of Allotment 02.09.04 13.09.04 23.09.04 23.09.04 23.09.04 15.04.2005 15.09.2005 21.10.2005 05.01.2006

Name of Benchmark Index CRISIL Liquid Fund Index CRISIL S&P CRISIL MIP BSE 200 BSE CRISIL BSE 200Composite CNX Blended Sensivity LiquidBond Fund Nifty Index Index Fund

Index Index

CAGR

Growth – – – 69.74% 10.75% 62.30%^ 12.57%^ 1.70%^ 9.63%^

Regular - Growth (%) 4.83% 4.92% 3.90% – – – – – –

Institutional - Growth (%) 5.33% 5.40% – – – – – 1.90%^ –

Institutional Plus Plan - Growth 2.25%^ 2.22%^ – – – – – – –

Benchmark Index Returns (%) 4.59% 4.61% 3.78% 49.12% 9.57% 52.13%^ 23.14%^ 1.68%^ 4.99%^

1.89%^ 1.89%^ – – – – – – –

Net Assets end of the year end (Rs. Crs.) 1387.64 448.27 144.64 258.94 73.87 257.95 203.33 74.98 114.05

Ratio of Recurring Expenses to net assets

Regular Plan 0.95% 0.95% 1.43% 2.37% 2.25% 2.28% 2.26% 1.09% 2.31%

Institutional Plan 0.42% 0.42% 0.60%

Institutional Plus Plan 0.29% 0.30% – – – – – – –

^ Absolute Returns

AUDITED CONDENSED FINANCIAL INFORMATION

Particulars For the year ended March 31, 2005

AACF AAFRF AAFDF AAEF AAMIP

NAV at the beginning of the year* – – – – –

Net Income per unit (Rs.) 0.3342 0.3032 0.7464 2.9621 0.3670

Dividends Paid (Rs. per unit)

Dividend – – – 1.75 –

Regular - Monthly Dividend (Individual / HUF) 0.22522976 – – – –

Regular - Monthly Dividend (Others) 0.21048726 – – – –

Regular - Weekly Dividend (Individual / HUF) 0.22671486 – – – –

Regular - Weekly Dividend (Others) 0.21201180 – – – –

Regular - Quarterly Dividend (Individual / HUF) – 0.1103 – – –

Regular - Quarterly Dividend (Others) – 0.103 – – –

Regular - Half Yearly Dividend (Individual / HUF) – 0.1096 – – –

Regular - Half Yearly Dividend (Others) – 0.1021 – – –

Monthly Dividend (Individual / HUF) – – – – 0.2472

Monthly Dividend (Others) – – – – 0.2311

Quarterly Dividend (Individual / HUF) – – – – 0.2643

Quarterly Dividend (Others) – – – – 0.2466

Institutional - Daily Dividend (individual / HUF) 0.24186475 0.24554072 – – –

Institutional - Daily Dividend (Others) 0.23374839 0.22961520 – – –

Institutional - Monthly Dividend (individual / HUF) – 0.11906252 0.1282 – –

Institutional - Monthly Dividend (Others) – 0.19389441 0.1199 – –

Transfer to reserves (Rs. in Lakhs) 480.51 177.72 15.21 5,134.27 72.27

NAV at the end of the year ended March 31, 2005 (Rs.)

Growth – – – 13.21 10.5179

Dividend – – – 13.23 –

Monthly Dividend – – – – 10.2337

Quarterly Dividend – – – – 10.2156

Regular Growth 10.2598 10.2605 10.1283 – –

Particulars Period Ended February 24, 2006

AACF AAFRF AAFDF AAEF AAMIP AAOF AADYF AALTFRF AATAP

35


Regular Weekly Dividend 10.0000 – – – –

Regular Monthly Dividend NA 10.0030 – – –

Regular - Quarterly Dividend – – 10.0020 – –

Regular - Half Yearly Dividend – – 10.0024 – –

Institutional Growth 10.2866 10.2817 – – –

Institutional Daily Dividend 10.0000 10.0000 – – –

Institutional Monthly Dividend NA 10.0036 – – –

$ Absolute Returns as these schemes have not completed one year of its existence

Growth (%) – – – 32.10% 5.18%

Regular - Growth (%) 2.60% 2.60% 1.28% – –

Institutional Growth (%) 2.87% 2.82% 1.90% – –

Date of Allotment 02.09.04 13.09.04 23.09.04 23.09.04 23.09.04

Name of Benchmark Index CRISIL Liquid CRISIL S&P CRISIL MIPFund Index Composite CNX Blended

Bond Fund Nifty IndexIndex

Benchmark Index Returns (%)# 2.47% 2.36% 1.87% 17.93% 3.63%

Net Assets end of the year end (Rs. Crs.) 427.91 353.82 21.73 205.04 24.92

Ratio of Recurring Expenses to net assets

Regular Plan 0.82% 0.80% 2.19% 2.35% 2.25%

Institutional Plan 0.40% 0.42% 1.00%

Notes :

* AACF, AAFRF, AAFDF, AAEF & AAMIP have been launched during the financial year 2004-2005. AAOF, AADYF, AALTFRF and AATAP has been launchedduring the financial year 2005-2006.

** Quarterly Dividend Option under the Institutional Plan offered by AAFDF has been withdrawn with effect from November 16, 2004. Institutional Planoffered by AAFDF has been wound up with effect from April 1, 2005.

$ The Schemes have not completed a year in existence, hence the returns are calculated in absolute terms from the date of allotment. Returns do nottake into account the load, if any. Hence, actual "Returns" would be lower than those shown above. Returns are calculated on Rs. 10/- invested atinception and are calculated for the Growth Options of the respective Scheme(s) / Plan(s), considering the movement in NAV during the period.

# Based on the investment pattern / objective, the returns of the schemes have been compared with the benchmark adopted by the Board of AMC andTrustees. The benchmark returns are absolute and have been calculated for the same period as the returns of the respective schemes.

BORROWINGS OF THE MUTUAL FUND

The details of borrowings made by the Scheme(s) of the Mutual Fund till February 24, 2006 are given below:

Scheme Amount (Rs. Crs.) Date of Borrowing Amount as % to NAV Purpose of Borrowing Time

AACF 60 26/03/05 15.61 Redemption Funding 1 day

75 20/12/05 5.84 Redemption Funding 3 days

5023/12/05 7.34 Redemption Funding

3 days

25 4 days


9 days

25 10 days




2 days

31 6 days


1 day

50 2 days


9 days

15 14 days


19 07/02/2006 2.30 Redemption Funding 1 day


3 days

7 4 days

AAFRF 25 20/12/05 5.79 Redemption Funding 3 days




2 days

32 7 days


14 days

5 2 days



4 days

5 3 days

AAEF 7 30/12/05 0.03 Redemption Funding 3 days

Particulars For the year ended March 31, 2005

AACF AAFRF AAFDF AAEF AAMIP

36



UNITHOLDERS’ RIGHTS & SERVICES

INVESTOR SERVICES

The Mutual Fund believes in providing the investor with superior servicesto make the investor’s experience in dealing with the Mutual Fund an efficientand satisfactory one. In order to achieve these goals, the Mutual Fund willendeavour to continuously establish and upgrade systems to handletransactions efficiently and resolve any investor grievances promptly.

CONVENIENCE IN TRANSACTIONS

The Mutual Fund intends to make every transaction of the Investor aconvenient one. The Mutual Fund presently has Investor Service Centres in5 cities. In addition to these, the Mutual Fund presently has a tie up with theRegistrar and Transfer Agent who has set up Investor Service Centres invarious cities.

The list of Collection Centres for accepting applications during the NewFund Offer Period are given in the inside back cover of the Offer Document.After the New Fund Offer Period, the requests for transactions in the Unitsof the Scheme will be accepted at the official points of acceptance. The listof the official points of acceptance of transactions is also given in the insideback cover of the Offer Document. All switch requests during the NewFund Offer Period of the Scheme will have to be submitted at the OfficialPoints of Acceptance of Transactions. Switch requests received at any othercentres are liable to be rejected.

Over a period of time, the Mutual Fund will endeavour to add further InvestorService Centres and / or sales offices in other cities.

Each ISC will provide investors with requisite information and help inprocessing transactions in the Scheme of the Mutual Fund. Adequate trainingwill be imparted to personnel managing the Investor Service Centres, witha view to early resolution of queries.

RECEIVING ACCOUNT STATEMENT / CORRESPONDENCE BYE-MAIL

The Mutual Fund will encourage Unitholder(s) to provide their e-mailaddresses for all correspondence. It is planned that the Mutual Fund’swebsite would facilitate request for Account Statement by Unitholder(s). Ifopted / requested by the Unitholder(s), the Mutual Fund will endeavour tosend Account Statement and any other correspondence using e-mail as themode of communication.

If the Unitholder(s) experiences any difficulty in accessing the electronicallydelivered Account Statement, the Unitholder(s) shall promptly advise theMutual Fund to enable the Mutual Fund to make the delivery throughalternate means. Failure to advise the Mutual Fund of such difficulty within24 hours after receiving the e-mail, will serve as an affirmation regardingthe acceptance by the Unitholder(s) of the Account Statement.

It is deemed that the Unitholder(s) is aware of all security risks includingpossible third party interception of the Account Statement and content ofthe Account Statement becoming known to third parties. The Mutual Fundwill not be responsible or liable in any manner for any correspondence sentto the Unitholder(s) using e-mail as the mode of communication atUnitholder’s request or on an ad-hoc basis.

FAX SUBMISSION

In order to facilitate quick processing of transactions and / or instructions ofinvestors the AMC / Trustee / Mutual Fund may (at its sole discretion andwithout being obliged in any manner to do so and without being responsibleand/or liable in any manner whatsoever) accept and process any applications,supporting documents and / or instructions submitted by an investor /unitholder by facsimile (“Fax Submission”) and the Investor / unitholdervoluntarily and with full knowledge takes and assumes any and all risksassociated therewith. The AMC/ Trustee / Mutual Fund shall have noobligation to check or verify the authenticity or accuracy of Fax Submissionspurporting to have been sent by the Investor and may act thereon as ifsame had been duly given by Investor.

The investor / unitholder shall indemnify the AMC / Trustee / Mutual Fund atall times and keep the AMC / Trustee / Mutual Fund indemnified and saveharmless against any and all claims, losses, damages, costs, liabilities andexpense (including without limitation, interest and legal fees) actuallyincurred, suffered or paid by the AMC / Trustee / Mutual Fund (directly orindirectly) and also against all demands, actions, suits proceedings made,filed, instituted against the AMC / Trustee / Mutual Fund (by the investor orany third party), in connection with or arising out of or relating to the AMC /Trustee / Mutual Fund accepting and acting pursuant to, in accordance withor relying upon, any Fax Submission signed by the Investor or authorisedrepresentative of the Investor. In all cases the investors will have toimmediately submit the original documents / instructions to the AMC / Mutualfund.

USE OF INTERMEDIARIES

The investor is aware that the Mutual Fund or AMC need to useintermediaries such as post office, local and international couriers, banksand other intermediaries for correspondence with the investor and for makingpayments to the investor by cheques, drafts, warrants, through ElectronicClearing Services (ECS) etc. The investor expressly agrees and authorisesthe Mutual Fund or AMC or their Agents to correspond with the investor ormake payments through intermediaries including but not limited to postoffice, local and international couriers and banks. The investor clearlyunderstands that the Mutual Fund or AMC uses such intermediaries forconvenience of the investor and in cases of delayed receipt or non-receiptof any correspondence or payment through such intermediaries the liabilityof the Mutual Fund or AMC or their Agents will be limited only to the extentprescribed under any law applicable to such intermediaries.

INFORMATION DISSEMINATION

The AMC will disclose the first NAV of the Scheme not later than 30 daysfrom the closure of New Fund Offer Period. Subsequently, the NAV will bedisclosed at the close of every Business Day. Information regarding NAVcan be obtained by the Unitholders / Investors by calling or visiting the nearestISC.

The NAVs of the Scheme shall be published atleast in two dailynewspapers on a daily basis in accordance with the SEBIRegulations. NAVs will also be displayed on the Website of the AMC(www.assetmanagement.abnamro.co.in).

The AMC shall update the NAVs on the website of Association of MutualFunds in India – AMFI (www.amfiindia.com) and the website of the AMCby 8.00 p.m. everyday. In case of any delay, the reasons for such delaywould be explained to AMFI and SEBI by the next day. If the NAVs are notavailable before 9.30 a.m. on the following day due to any reason, the MutualFund shall issue a press release providing reasons and explaining when theMutual Fund would be able to publish the NAVs.

The Redemption price of Units shall be published in a daily newspaper on adaily basis in accordance with the SEBI Regulations.

The AMC shall display the Newsletters on the website of the AMC(www.assetmanagement.abnamro.co.in). Investors / Unitholders, onwritten request can obtain (post/e-mail) a copy of the Newsletter or contactany of the Investor Service Centres.

An abridged scheme-wise annual report shall be mailed to all Unitholdersnot later than six months from the date of closure of the relevant accountingyear and the full annual report shall be available for inspection at the headoffice of the Mutual Fund and a copy shall be made available to theUnitholders on request and on payment of nominal fees, if any. Theseresults shall also be displayed on the website of the AMC(www.assetmanagement.abnamro.co.in ) and that of AMFI(www.amfiindia.com).

Before expiry of one month from the close of each half year that is onMarch 31 and September 30, the Mutual Fund shall publish its unauditedfinancial results in one national English daily newspaper and in a newspaperin the language of the region where the Head Office of the MutualFund is situated, as per the format prescribed by SEBI. These resultsshall also be displayed on the website of the Mutual Fund(www.assetmanagement.abnamro.co.in ) and that of AMFI(www.amfiindia.com).

The Mutual Fund shall before the expiry of one month from the close ofeach half year i.e. March 31 and September 30, send to all Unitholders acomplete statement of its Scheme portfolio. Provided that the statementof Scheme portfolio may not be sent to the Unitholders if the statement ispublished, by way of an advertisement, in one English daily Newspapercirculating in the whole of India and in a newspaper published in the languageof the region where the Head Office of the Mutual Fund is situated. Thestatement of the Scheme Portfolio shall also be displayed on the website ofthe Mutual Fund (www.assetmanagement.abnamro.co.in). The statementof the Scheme Portfolio shall be in the format as prescribed by SEBI.

The Mutual Fund shall disclose large unitholdings in the Scheme which areover 25% of the NAV. The information on the number of such investors andtotal holdings by them in percentage terms, shall be disclosed in the allotmentletters after the New Fund Offer Period and also in the annual and the half-yearly results.

The annual report containing accounts of the AMC shall be displayed on theWebsite of the AMC (www.assetmanagement.abnamro.co.in).Unitholders, if they so desire, may request for the annual report of the AMC.

SECTION V

37


PERSONAL IDENTIFICATION NUMBER (PIN)

The PIN facility may be made available to the Unitholders in future.Unitholders will be required to indicate their requirement and completenecessary documentation as may be required. The Registrar and TransferAgent on receipt of this request, will mail to such Unitholders, the ‘DisclaimerForm’ together with detailed terms and conditions subject to which its usagewill be permitted. On receipt of the ‘Disclaimer Form’ duly signed by theUnitholder, the PIN will be mailed to each Unitholder. Unitholders may usethe PIN to conduct such transactions as offered by the Mutual Fund fromtime to time. The Unitholder will be asked for the PIN before the request isaccepted. In the interest of the Unitholder, the Registrar and Transfer Agentreserves the right to ask for a fax confirmation of the request and any otheradditional information about the account of the Unitholder.

The PIN should never be disclosed to any person or written down whereany other person may discover it. All transactions conducted with use ofthis PIN will be the responsibility of the Unitholder and the Unitholder willabide by the record of the transactions generated. The Mutual Fund and theISC / Registrar and Transfer Agent shall not accept any responsibility for theunauthorised use of the PIN.

RIGHTS OF UNITHOLDERS

u Unitholders of the Scheme have a proportionate right in the beneficialownership of the assets of the Scheme.

u The Trustee is bound to make such disclosures to the Unitholders asare essential in order to keep them informed about any informationknown to the Trustee which may have a material adverse bearing ontheir investments.

u When the Mutual Fund declares a dividend, the dividend warrants shallbe despatched within 30 days of the declaration of the dividend.

u The Mutual Fund shall despatch Redemption proceeds within 10Business Days from the date of acceptance of the request of the same.

u The appointment of the AMC for the Mutual Fund can be terminatedby majority of the Directors of the Trustee or by 75% of the Unitholdersof the Scheme and any change in the appointment of the AMC shallbe subject to the prior approval of SEBI and the Unitholders of theScheme.

u The Trustee is obliged to convene a meeting on a requisition of 75% ofthe Unitholders of the Scheme.

u 75% of the Unitholders of a Scheme can pass a resolution to wind-upthe Scheme.

u The Trustee shall obtain the consent of the Unitholders:

u whenever required to do so by SEBI, in the interest of theUnitholders.

u whenever required to do so on the requisition made by three-fourths of the Unitholders of the Scheme.

u when the Trustee decides to wind up the Scheme or prematurelyredeem the Units.

u The Trustee may amend the Trust Deed with the prior approval of SEBIand the Unitholders where it affects the interest of Unitholders.

u The Trustee shall ensure that no change in the fundamental attributesof any Scheme or the trust or fees and expenses payable or any otherchange which would modify the Scheme and affects the interest ofUnitholders, shall be carried out unless :

(i) a written communication about the proposed change is sent toeach Unitholder and an advertisement is given in one Englishnewspaper having nation-wide circulation as well as in anewspaper published in the language of the region where thehead office of the Mutual Fund is situated; and

(ii) the Unitholders are given an option to exit at the prevailing NetAsset Value without any Exit Load.

u Unitholder would have the right to inspect all the documents listedunder “Documents Available for Inspection.

DURATION OF THE SCHEME / WINDING UP

Being open-ended, the Scheme has perpetual life. However, in terms of theRegulations, a Scheme may be wound up after repaying the amount due tothe Unitholders:

1. On happening of any event, which in the opinion of the Trustee, requiresthe Scheme to be wound up, OR

2. If seventy five percent (75%) of the Unitholders of the Schemes passa resolution that the Scheme be wound up, OR

3. If SEBI so directs in the interest of the Unitholders, OR

4. In case of non-fulfillment of two conditions prescribed in terms of

minimum number of investors vide SEBI circular No. SEBI/IMD/CIRNo.10/22701/03 dated December 12, 2003 (including amendmentsthereto form time to time), OR

Where a Scheme is so wound up, the Trustee shall give notice of thecircumstances leading to the winding up of the Scheme:

1. to SEBI; and

2. in two daily newspapers having circulation all over India and also in avernacular newspaper circulating at the place where the head office ofthe Mutual Fund is situated.

EFFECT OF WINDING UP

On and from the date of the publication of the notice of winding up asstated above, the Trustee or the AMC as the case maybe, shall

(a) cease to carry on any business activities in respect of the Scheme sowound up;

(b) cease to create or cancel Units in the Scheme;

(c) cease to issue or redeem Units in the Scheme.

PROCEDURE AND MANNER OF WINDING UP

The Trustee shall call a meeting of the Unitholders to approve by simplemajority of the Unitholders present and voting at the meeting for authorisingthe Trustee or any other person to take steps for the winding up of theScheme.

The Trustee or the person authorised above, shall dispose of the assets ofthe Scheme concerned in the best interest of the Unitholders of the Scheme.

The proceeds of sale realised in pursuance of the above, shall be first utilisedtowards discharge of such liabilities as are due and payable under theScheme, and after meeting the expenses connected with such winding up,the balance shall be paid to Unitholders in proportion to their respectiveinterest in the assets of the Scheme, as on the date the decision for windingup was taken.

On completion of the winding up, the Trustee shall forward to SEBI and theUnitholders a report on the winding up, detailing the circumstances leadingto the winding up, the steps taken for disposal of the assets of the Schemebefore winding up, net assets available for distribution to the Unitholdersand a certificate from the auditors of the Fund.

Notwithstanding anything contained above, the provisions of the Regulationsin respect of disclosures of half-yearly reports and annual reports shallcontinue to be applicable.

After the receipt of the report referred to above, if SEBI is satisfied that allmeasures for winding up of the Scheme have been complied with, theScheme shall cease to exist.

MINIMUM NUMBER OF INVESTORS AND MAXIMUM HOLDINGBY A SINGLE INVESTOR

As per SEBI circular dated December 12, 2003 ref SEBI/IMD/CIR No. 10/22701/03, each Scheme and individual Plan(s) under the Schemes shouldhave a minimum of 20 investors and no single investor shall account formore than 25% of the corpus of such Scheme/ Plan(s). In case of non-fulfilment with either of the above two conditions in a three months timeperiod or the end of succeeding calendar quarter, whichever is earlier, fromthe close of the New Fund Offer Period (NFO) of the Schemes or on an on-going basis for each calendar quarter, the Scheme / Plan(s) shall be woundup automatically without any reference from SEBI in accordance with theguidelines prescribed by SEBI.

TAX BENEFITS OF INVESTING IN THE MUTUAL FUND

As per the taxation laws in force as at the date of the Document, the taxbenefits that are available to the investors investing in the Units of the Plansare stated as follows.

The tax benefits described in this Document are as per the provisions of theIncome-tax Act, 1961 subject to relevant conditions.

The information given is included only for general purpose and is based onadvice received by the AMC regarding the law and practice currently inforce in India and the Investors/ Unit holders should be aware that the relevantfiscal rules or their interpretation may change. As is the case with anyinvestment, there can be no guarantee that the tax position prevailing at thetime of an investment in the Scheme will endure indefinitely. In view of theindividual nature of tax consequences, each Investor / Unit holder is advisedto consult his / her or its own professional tax advisor.

Tax Benefits to the Mutual Fund

ABN AMRO Mutual Fund is a Mutual Fund registered with the Securities &Exchange Board of India and, hence, the entire income of the Mutual Fundis exempt from income-tax in accordance with the provisions of Section10(23D) of the Income-tax Act, 1961, (the Act).

38



The Mutual Fund will receive all income without any deduction of tax atsource under the provisions of Section 196(iv) of the Act.

However, the Mutual Fund shall be liable to pay securities transaction tax inrespect of certain transactions listed hereunder:

Sr. Taxable securities transaction Rate (%) STTNo. Payable

by

1 Purchase of an equity share in acompany or a unit of an equityoriented fund, where-

a) the transaction of such purchase isentered into in a recognizedstock exchange; and 0.1 Purchaser

b) the contract for the purchase ofsuch share or unit is settled by theactual delivery or transfer of suchshare or unit

2 Sale of an equity share in a company ora unit of an equity oriented fund,where -

a) the transaction of such sale isentered into in a recognized stock 0.1 Sellerexchange; and

b) the contract for the sale of suchshare or unit is settled by the actualdelivery or transfer of such shareor unit

3 Sale of an equity share in a companyor a unit of an equity oriented fund,where -

a) the transaction of such sale isentered into in a recognized stockexchange; and 0.02 Seller

b) the contract for the sale of suchshare or unit is settled otherwisethan by the actual delivery ortransfer of such share or unit

4 Sale of a derivative, where thetransaction of such sale is enteredinto in a recognized stock exchange 0.0133 Seller

5 Sale of unit of an equity orientedfund to the Mutual Fund 0.2 Seller

Value of taxable securities transaction in case of:

u option in securities - the aggregate of the strike price and the optionpremium of such option in securities;

u futures – at the price at which such futures are traded; and

u any other security – at the price at which such securities are purchasedor sold.

“Equity oriented fund” means a fund:

(1) where the investible funds are invested by way of equity shares indomestic companies to the extent of more than fifty percent of thetotal proceeds of such fund; and

(2) which has been set-up under a scheme of a Mutual fund:

Provided that the percentage of equity share holding of the fund shall becomputed with reference to the annual average of the monthly averages ofthe opening and closing figures.

Income distribution, if any, made by the Mutual Fund (other than an open-ended equity oriented fund) shall attract distribution tax under Section 115Rof the Act, at 14.025 per cent (inclusive of surcharge at 10 per cent onincome-tax and an additional surcharge by way of education cess at the rateof 2 per cent on the amount of tax inclusive of surcharge) in case income isdistributed to individuals and Hindu Undivided Family (HUFs), and at 22.44per cent (inclusive of surcharge at 10 per cent on income-tax and an additionalsurcharge by way of education cess at the rate of 2 per cent on the amountof tax inclusive of surcharge in case income is distributed to persons otherthan individual and HUFs.

The exemption granted to open-ended equity oriented funds from payingdistribution tax on income distributed has been extended without any timelimit, effective from 1 April, 2004.

Service Tax

Mutual Funds shall be liable for payment of service tax as recipient of serviceson “Business Auxiliary Service” provided by distributors of mutual funds /

agents. The rate of Service tax is 10.2 per cent (tax rate of 10 percent pluseducation cess of 2 per cent of the tax).

Tax Benefits to Unit Holders

i. Income-tax

Income distributed by the Mutual Fund

All Unit Holders

Income received in respect of units of a mutual fund, is exempt from taxunder Section 10(35) of the Act. Exemption from income-tax under section10(35) of the Act shall however not apply to any income arising from thetransfer of these units.

Tax Deduction at Source on income distributed

All Unit Holders

In view of the exemption of income in the hands of the Unit holders, noincome-tax is deductible at source, on income distribution by the MutualFund on or after April 1, 2003.

Securities Transaction Tax

All Unit Holders

Unit holders shall be liable to pay securities transaction tax in respect oftransactions of purchase and sale of units of equity oriented fund as under:

Sr. Taxable securities transaction Rate (%) STTNo. Payable

by

1 Purchase of a unit of an equity orientedfund, where-

a) the transaction of such purchase isentered into in a recognized stockexchange; and 0.1 Purchaser

b) the contract for the purchase of suchunit is settled by the actual deliveryor transfer of such share or unit

2 Sale of a unit of an equity oriented fund,where -


b) the contract for the sale of such unitis settled by the actual delivery ortransfer of such share or unit

3 Sale of a unit of an equity oriented fund,where -


b) the contract for the sale of such unitis settled otherwise than by theactual delivery or transfer of suchshare or unit

4 Sale of unit of an equity oriented fundto the Mutual Fund 0.2 Seller

Value of taxable securities transaction in case of units shall be the price atwhich such units are purchased or sold.

Capital Gains Tax

As per the provisions of section 2(42A) of the Act, a unit of a Mutual Fund,held by the investor as a capital asset, is considered to be a short-termcapital asset, if it is held for 12 months or less from the date of its acquisitionby the unit holder. Accordingly, if the unit of a Mutual Fund is held for aperiod of more than 12 months, it is treated as a long-term capital asset.

Where sale / repurchase transaction of units is chargeable to STT

All Unit Holders

As per Section 10(38) of the Act, long-term capital gains arising from thesale of unit of an equity oriented fund entered into in a recognised stockexchange or sale of such unit of an equity oriented fund to the mutual fundis exempt from tax, provided such transaction of sale is chargeable tosecurities transaction tax.

As per Section 111A of the Act, short-term capital gains arising from thesale of unit of an equity oriented fund entered into in a recognised stockexchange or sale of such unit of an equity oriented fund to the mutual fundshall be taxed at 10 per cent, provided such transaction of sale is chargeableto securities transaction tax. The said tax rate shall be increased by applicablesurcharge of 10 per cent in case of non-corporate Unit holders, where thetotal income exceeds Rs.1,000,000; and 10 per cent surcharge in case of

39


resident corporate Unit holders, and 2.5% in case of non-resident corporateunit holder irrespective of the amount of taxable income. Further, an additionalsurcharge of 2 per cent by way of education cess shall be charged on amountof tax inclusive of surcharge.

However, in case of Individuals and HUF (being a resident), where taxableincome as reduced by short-term capital gains arising on sale of units of anequity oriented fund is upto / below the basic exemption limit, the short-term capital gains shall be reduced to the extent of the shortfall and only thebalance short-term capital gains shall be subjected to the flat rate of income-tax.

Securities transaction tax is not deductible while computing capital gains.

However, in case of non-resident unit holder who is a resident of a countrywith which India has signed a Double Taxation Avoidance Agreement (whichis in force) income tax is payable at the rate provided in the Act or the rateprovided in the said agreement, whichever is more beneficial to such non-resident unit holder.

Where sale / repurchase transaction in units are not chargeable to STT

Foreign Institutional Investors

Long-term capital gains arising on sale / repurchase of units (other than unitof equity oriented fund referred to above), shall be taxed at the rate of 10per cent under Section 115AD of the Act. The said tax rate shall be increasedby applicable surcharge of 10 per cent in case of non-corporate Unit holders,where the total income exceeds Rs.1,000,000 and 2.5 per cent surchargein case of corporate Unit holders irrespective of the amount of taxableincome. Further, an additional surcharge of 2 per cent by way of educationcess shall be charged on amount of tax inclusive of surcharge. Such gainsshall be calculated without inflation index and currency fluctuations.

Short-term capital gains arising on sale / repurchase of such units (otherthan unit of equity oriented fund referred to above) shall be taxed at 30 percent. The said tax rate shall be increased by applicable surcharge of 10 percent in case of, non-corporate Unit holders, where the total income exceedsRs.1,000,000 and 2.5 per cent surcharge in case of corporate Unit holdersirrespective of the amount of taxable income. Further, an additional surchargeof 2 per cent by way of education cess shall be charged on amount of taxinclusive of surcharge.

However, in case of FII unit holder who is a resident of a country with whichIndia has signed a Double Taxation Avoidance Agreement (which is in force)income tax is payable at the rate provided in the Act or the rate provided inthe said agreement, whichever is more beneficial to such FII unit holder.

Specified overseas Financial Organisations

As per the provisions of section 115AB of the Act, long-term capital gainsarising on sale / repurchase of units (other than unit of equity oriented fundreferred to above) purchased in foreign currency shall be liable to tax at theconcessional rate of 10 per cent. The said tax rate shall be increased byapplicable surcharge of 10 per cent in case of non-corporate Unit holders,where the total income exceeds Rs.1,000,000 and 2.5 per cent surchargein case of corporate Unit holders irrespective of the amount of taxableincome. Further, an additional surcharge of 2 per cent by way of educationcess shall be charged on amount of tax inclusive of surcharge. However,such gains shall be computed without the benefit of cost indexation.

Short-term capital gains arising on sale / repurchase of such units (otherthan unit of equity oriented fund referred to above) purchased in foreigncurrency may be taxed at 40 per cent in case of foreign companies, and 30per cent in case of others. The said tax rate shall be increased by applicablesurcharge of 10 per cent in case of non-corporate Unit holders, where thetotal income exceeds Rs.1,000,000 and 2.5 per cent surcharge in case ofcorporate Unit holders irrespective of the amount of taxable income. Further,an additional surcharge of 2 per cent by way of education cess shall becharged on amount of tax inclusive of surcharge. Each Unit holder is advisedto consult his / her or its own professional tax advisor for application of taxrate of 10 per cent (increased by applicable surcharge and education cess)on short-term capital gains arising on sale / repurchase of such units (otherthan unit of equity oriented fund referred to above) purchased in foreigncurrency.

However, in case of such specified overseas financial organisation unit holderwho is a resident of a country with which India has signed a Double TaxationAvoidance Agreement (which is in force) income tax is payable at the rateprovided in the Act or the rate provided in the said agreement, whichever ismore beneficial to such specified overseas financial organisation unit holder.

Other Unit Holders

Long-term Capital Gains

Long-term Capital Gains arising on sale / repurchase of units (other thanunit of equity oriented fund referred to above), shall be chargeable underSection 112 of the Act, at concessional rate of tax, at 20 per cent. The saidtax rate shall be increased by applicable surcharge of 10 per cent in case ofindividuals, HUF, association of person, body of individuals Unit holders,where the total income exceeds Rs.1,000,000, and 10 per cent surcharge

in case of firm and corporate Unit holders (being resident) and 2.5 per centsurcharge in case of firm and corporate Unit holders (being non-resident)irrespective of the amount of taxable income. Further, an additional surchargeof 2 per cent by way of education cess shall be charged on amount of taxinclusive of surcharge.

The following amounts shall be deductible from the full value of consideration,to arrive at the amount of capital gains:

u Cost of acquisition of Units as adjusted by Cost Inflation Index notifiedby the Central Government, and

u Expenditure incurred wholly and exclusively in connection with suchtransfer.

However, where the tax payable on such long-term capital gains, computedbefore indexation, exceeds 10 per cent, (as increased by the applicablesurcharge and education cess), of the amount of capital gains, such excesstax shall not be payable by the Unit holder.

In case of Individuals and HUF (being a resident), where taxable income asreduced by long-term capital gains arising on sale of units (other than unit ofan equity oriented fund) is upto / below the basic exemption limit, the long-term capital gains shall be reduced to the extent of the shortfall and only thebalance long-term capital gains shall be subjected to the flat rate of income-tax.

Short-term Capital Gains

Short-term Capital Gains arising on sale / repurchase of units (other thanunit of equity oriented fund referred to above) shall be taxed at 30 per centplus 10 per cent surcharge in case of corporate and firm unit holders (beingresident) irrespective of the amount of taxable income. Further, an additionalsurcharge of 2 per cent by way of education cess is payable on amount oftax inclusive of surcharge.

Short-term capital gains arising on sale / repurchase of units (other than unitof equity oriented fund referred to above) shall be taxed at 30 per cent incase of local authority (being resident). Further, an additional surcharge of 2per cent by way of education cess is payable on amount of tax.

Short-term capital gains arising to a co-operative society (being resident)are taxable on progressive basis as given below:

Where total income for a tax year 10% of the total income(April to March) is less than or equalto Rs. 10,000

Where such total income is more Rs. 1000 plus 20 per cent of thethan Rs.10,000 but does not amount by which the totalexceed Rs. 20,000 income exceeds Rs.10,000

Where the total income exceeds Rs. 3,000 plus 30 per cent of theRs. 20,000 amount by which the total

income exceeds Rs. 20,000

Further, an additional surcharge of 2 per cent by way of education cess ispayable on amount of tax.

Short-term capital gains arising to individuals and HUFs are taxable onprogressive basis, as given below:

Where total income for a tax year Nil(April to March) is less than or equalto Rs. 100,000 (the basicexemption limit)

Where such total income is more 10 per cent of the amount bythan Rs.100,000 but is less than or which the total income exceedsequal to Rs. 150,000 Rs.1,00,000

Where such total income is more Rs. 5,000 plus 20 per cent of thethan Rs. 150,000 but is less than or amount by which the totalequal to Rs. 250,000 income exceeds Rs. 150,000

Where such total income is more Rs. 25,000 plus 30 per cent ofthan Rs. 250,000 the amount by which the total

income exceeds Rs. 250,000

The basic exemption limit in case of a senior citizen is Rs. 185,000 while incase of a resident individual being a woman is Rs. 135,000

Where the total income of the individual/ HUF exceeds Rs. 1,000,000,surcharge of 10 per cent will be payable on the tax calculated on such totalincome (net of applicable tax rebates). Further, an additional surcharge of 2per cent by way of education cess shall be chargeable on amount of taxinclusive of surcharge.

However, in case of such other non-resident unit holder who is a resident ofa country with which India has signed a Double Taxation AvoidanceAgreement (which is in force) income-tax is payable at the rate provided inthe Act or the rate provided in the said agreement, whichever is morebeneficial to such other non-resident unit holder.

40



Where sale / repurchase is made during the minority of the child, tax will belevied on either of the parents, whose income is greater, where the saidincome is not covered by the exception in the proviso to section 64(1A) ofthe Act. When the child attains majority, such tax liability will be on thechild.

There are no tax rebates available. However, individuals and HUF, can claimdeduction from total income, under a section 80C of the Act, in respect ofspecified investments made during the year.

Set off of Capital Losses

All Unit Holders

The long-term capital loss suffered on sale / repurchase of units (other thanunit of equity oriented fund referred to above) shall be available for set offagainst long-term capital gains arising on sale of other assets and balanceunabsorbed long-term capital loss shall be carried forward for set off onlyagainst long-term capital gains in subsequent years.

Short-term capital loss suffered on sale / repurchase of units shall be availablefor set off against both long-term and short-term capital gains arising onsale of other assets and balance unabsorbed short-term capital loss shall becarried forward for set off against capital gains in subsequent years.

Such carry forward is admissible maximum upto eight assessment years.

Each Unit holder is advised to consult his / her or its own professional taxadvisor before claiming set off of long-term capital loss arising on sale /repurchase of units of an equity oriented fund referred to above, againstlong-term capital gains arising on sale of other assets.

Provisions relating to Dividend

All Unit Holders

Under the provisions of Section 94(7) of the Act, loss arising on sale ofUnits, which are bought within 3 months prior to the record date (i.e. thedate fixed by the Mutual Fund for the purposes of entitlement of the Unitholders to receive the income) and sold within 9 months after the recorddate, shall be ignored for the purpose of computing income chargeable totax to the extent of exempt income received or receivable on such Units.

Provisions relating to Bonus

All Unit Holders

Additionally, as per sub clause (8) to section 94 of the Act, wherein in caseof units purchased within a period of three months prior to the record datefor entitlement of bonus and sold within nine months after the record date,the loss arising on transfer of original units shall be ignored for the purposeof computing the income chargeable to tax. The loss so ignored shall betreated as cost of acquisition of such bonus units.

Tax Deduction at Source on Capital Gains

Domestic Unit Holders

No income-tax is deductible at source from income by way of capital gainsunder the provisions of the Act and as per Circular no. 715 dated August 8,1995 issued by the CBDT.

Foreign Institutional Investors

Under Section 196D of the Act, no deduction shall be made from any incomeby way of capital gains, in respect of transfer of units referred to in Section115AD of the Act.

Specified Overseas Financial Organisations

As per section 196B of the Act, income-tax is deductible on long-term capitalgains arising on sale / repurchase of units (other than unit of equity orientedfund referred to above) purchased in foreign currency, at the rate of 10 percent. The said tax rate shall be increased by applicable surcharge of 10 percent in case of non-corporate Unit holders, where the total income paidexceeds Rs.1,000,000; and 2.5 per cent surcharge in case of corporate Unitholders irrespective of the amount of taxable income. Further, an additionalsurcharge of 2 per cent by way of education cess is chargeable on amountof tax inclusive of surcharge. .

Income-tax is deductible on short-term capital gains arising on sale /repurchase of units (other than unit of equity oriented fund referred to above)at the rate of 40 per cent plus applicable surcharge at the rate of 2.5 percent in case of foreign companies; and 30 per cent plus applicable surchargeat the rate of 10 per cent where the total income paid exceeds Rs.1,000,000

in case of others. Further, an additional surcharge of 2 per cent by way ofeducation cess is chargeable on amount of tax inclusive of surcharge.

Other Non-resident Unit Holders

Part II of the First Schedule to the Finance Act, 2004, provides for deductionof tax at source on long-term capital gains arising on sale / repurchase ofunits (other than unit of equity oriented fund referred to the above) at therate of 20 per cent; and on short-term capital gains arising on sale / repurchaseof units at the marginal rates, viz. at 30 per cent in case of individuals andother non-corporate Unit holders; and at 40 per cent in case of corporateUnit holders. Surcharge on income-tax will be levied at 10 per cent on suchtax in respect of all Unit holders, other than corporate Unit holders, wherethe total income paid exceeds Rs. 1,000,000 and in respect of all corporateUnit holders at 2.5 per cent of such tax. Further, an additional surcharge of2 per cent by way of education cess shall be chargeable on amount of taxinclusive of surcharge.

In case of non-resident unit holder who is a resident of a country with whichIndia has signed a Double Taxation Avoidance Agreement (which is in force)the tax should be deducted at source under section 195 of the Act at therate provided in the Finance Act of the relevant year or the rate provided inthe said agreement, whichever is more beneficial to such non-resident unitholder. However, such a non-resident unit holder will be required to provideappropriate documents to the Fund, to be entitled to a beneficial rate undersuch agreement.

If the non-resident unit holder produces a nil or lower withholding certificatefrom the income tax authorities, then tax shall be deducted at such ratesmentioned in the certificate during the validity of the certificate.

Exemptions from Long-term Capital Gains

(i) As per the provisions of section 54EC of the Act, long-term capitalgains arising on sale / repurchase of units (other than unit of equityoriented fund referred to the above) shall be exempt from tax to theextent such capital gains are invested, within a period of six months ofsuch transfer, in acquiring specified bonds and remain so invested asspecified.

(ii) As per the provisions of section 54ED of the Act, long-term capitalgains arising on sale / repurchase of units (other than unit of equityoriented fund referred to the above) shall be exempt from tax to theextent such capital gains are invested, within a period of six months ofsuch transfer, in acquiring the equity shares forming part of a publicissue of an Indian public company and remain so invested as specified.

Rebate for the Securities Transaction Tax

All Unit Holders

A deduction in respect of securities transaction tax paid, is not permittedfor the purpose of computation of business income or capital gains.

However, as per Section 88E of the Act, a rebate of securities transactiontax paid shall be available to a unit holder where income from sale of unitsof an equity oriented fund is chargeable under the head “ Profits and gainsof business or profession”, from the income-tax on such income arisingfrom such transactions.

The amount of income-tax payable on the income arising from the taxablesecurities transaction shall be equal to the amount calculated by applyingthe average rate of income-tax on such income. The amount of rebate shallnot exceed the amount of income-tax on such income. This rebate shall beallowed only on production of evidence of payment of securities transactiontax in the prescribed form by the unit holder, alongwith its / his tax return.

Other Benefits

Investments in Units of the Mutual Fund will rank as an eligible form ofinvestment under Section 11 (5) of the Act read with Rule 17C of the Income-tax Rules, 1962, for Religious and Charitable Trusts.

ii. Wealth-tax

Units held under the respective Plans are not treated as assets as definedunder Section 2(ea) of the Wealth-tax Act, 1957 and thereof shall not liableto wealth-tax.

iii. Gift-tax

The Gift-tax Act, 1958 has ceased to apply to gifts made on or after October1, 1998. Gifts of Units, purchased under the respective Plans, shall therefore,be exempt from gift-tax.

41


OTHER MATTERS

UNITHOLDER GRIEVANCES REDRESSAL MECHANISM

Investor grievances will normally be received directly by the Registrar andTransfer Agent or at the Investor Service Centres or at the office the AMC.All grievances received at the Investor Service Centres or at the office theAMC will be forwarded to the Registrar and Transfer Agent for their necessaryaction. The complaints will be closely followed up with the Registrar andTransfer Agent to ensure timely redresses and prompt investor service.

For this purpose, Mr. K. M. Suneej has been appointed the Investor RelationsOfficer. He can be contacted at the office of the AMC. The address andphone numbers are :

ABN AMRO Asset Management (India) Limited


Nariman Point, Mumbai 400 021

Phone : 91-22-5656 3838

Fax : 91-22-5656 3840

E-mail : [email protected]

INVESTOR COMPLAINTS

The details of the investor complaints for the Schemes of ABN AMRO MutualFund received by Registrar/ Fund since inception till February 24, 2006 :

Name of the Scheme Number of Number of Number of

Complaints Complaints Complaints

received redressed pending

AADYF 32 32 0

AAEF 103 103 0

AACF 0 0 0

AAFDF 6 6 0

AAFRF 4 4 0

AAMIP 2 2 0

AAOF 70 70 0

AALTFRF 0 0 0

AATAP 3 3 0

AAFTP-1 0 0 0

The details of the investor complaints for the Schemes of ABN AMRO MutualFund forwarded by SEBI:

There are no investor complaints forwarded by SEBI to ABN AMRO MutualFund.

ASSOCIATE TRANSACTIONS

Investment in Associate Companies

The Schemes of ABN AMRO Mutual Fund had invested in the followinginstruments of Associate Companies of the Sponsor & AMC, from inceptionto February 24, 2006 :

Name Name of the Company Type of Amountof the Security (Rs. inScheme Crores)

AAEF MAHINDRA & MAHINDRA LTD.* EQUITY 21.30

AAOF MAHINDRA & MAHINDRA LTD .* EQUITY 11.16

AAMIP MAHINDRA & MAHINDRA LTD.* EQUITY 0.20

AATAP MAHINDRA & MAHINDRA LTD.* EQUITY 4.70

AACF ABN AMRO Bank N.V.** Fixed Deposit 265.00

AAFRF ABN AMRO Bank N.V.** Fixed Deposit 90.00

AAFTP-1 ABN AMRO Bank N.V.** Fixed Deposit 100.00

* This disclosure has been made as one of the Directors of the AMC isalso a Director on the Board of the above Company.

** This disclosure has been made as ABN AMRO Bank N.V. is an associateof the sponsor to the Mutual Fund.

The investments were made in line with the investment objective of theScheme(s).

Underwriting Obligations with respect to issues of Associate Companies

The Schemes of the Mutual Fund have till date not entered into anyunderwriting obligations with respect to issues of associate companies.

Subscription in issues lead managed by the Sponsor or any of itsassociates

The details of the subscription by the Schemes of ABN AMRO Mutual Fundin issues lead managed by the Sponsor or any of its associates, from inceptionto February 24, 2006 is given below :

Name of the Name of the Associate Type of AmountScheme Security (Rs. in

Crores)

AAFDF ABN AMRO Securities Securitised(India) Private Limited* Debt 26.06

AACF ABN AMRO Securities Securitised(India) Private Limited* Debt 16.10

AAFRF ABN AMRO Securities Securitised(India) Private Limited* Debt 11.50

AAMIP ABN AMRO Securities Securitised(India) Private Limited* Debt 1.92

* No brokerage / commission was paid to ABN AMRO Securities (India)Private Limited by the Mutual Fund.

The investment was made in line with the investment objective of theScheme(s).

DEALING WITH ASSOCIATE COMPANIES

Subject to the SEBI Regulations, the AMC from time to time, for the purposeof conducting normal business and the operations of the Mutual Fund mayutilise the services of and enter into transactions / arrangement with theSponsor or its group companies, subsidiaries, associates, affiliates, etc.,established or to be established at a later date to provide the services to theAMC / investors. The AMC will conduct its business with the aforesaidcompany(ies) (including employees or relatives) on arms’ length basis andat mutually agreed terms and conditions.

The AMC may also avail the services of the Sponsor or its group companies,subsidiaries, associates, affiliates, etc., for usage of premises as InvestorService Centres and to act as collection agents, marketing agents, distributionagents, bankers, client servicing etc. Such companies shall be paid a feebased on the quality of services rendered, which may be higher than themarket rates due to the quality of services rendered. These fees shall becharged to the Scheme, subject to the SEBI Regulations.

The AMC, subject to the SEBI Regulations and the restrictions placedthereunder, will from time to time enter into the transactions includingsecurities transaction with the Sponsor and its group companies, subsidiaries,associates, affiliates, etc. The AMC, subject to the SEBI Regulations, willform time to time subscribe on behalf of the Scheme of the Mutual Fund, inthe securities issue lead managed by the Sponsor and its group companies,subsidiaries, associates, affiliates, etc. The AMC shall ensure that theinvestments in such issues will be in line with the investment objectives ofthe Scheme.

Subject to the SEBI Regulations, the AMC on behalf of the Mutual Fundmay enter into transactions and / or avail services from the followingassociates / subsidiaries of the Sponsor in India :

u ABN AMRO Bank N. V.

u ABN AMRO Securities (India) Private Limited

u ABN AMRO Asia Equities (India) Limited

u ABN AMRO Asia Corporate Finance (India) Private Limited

u ABN AMRO Central Enterprise Services Private Limited

The AMC, subject to the SEBI Regulations and the restrictions/limitsprescribed thereunder, proposes to enter into transactions with the Sponsorand / or its subsidiaries/associates for purchase and sale of securities. TheScheme shall not make any investment in:

u Any unlisted security of an associate or group company of the Sponsor;

u Any security issued by way of private placement by an associate orgroup company of the Sponsor;

u The listed securities of group companies of the Sponsor which is inexcess of 25% of the net assets of the Scheme.

From time to time and subject to the SEBI Regulations, the Sponsor, theiraffiliates, associates, subsidiaries, the Mutual Fund and the AMC may inthe New Fund Offer Period or thereafter at any time during the continuousoffer period, invest directly or indirectly in the Scheme. These entities mayacquire a substantial portion of the Scheme’s Units and collectively constitutea major investor in the Scheme. Accordingly, redemption of Units held bysuch entities may have an adverse impact on the Scheme because thetiming of such redemption may impact the ability of other Unitholders toredeem their Units.

SECTION VI

42



The AMC and Trustee will perform for the Scheme of the Mutual Fund, theactivities detailed in the Investment Management Agreement and the TrustDeed respectively and will be entitled to remuneration for their services inaccordance with the terms of the said Agreement, subject to the SEBIRegulations.

The AMC has entered into security deals on behalf of the Schemes of theMutual Fund with counter-parties, who are associates of the Sponsor andthe AMC. Such purchase and sale deals are at the prevalent market rates.

The AMC has not made any investments in the Group companies of theSponsor and the AMC.

The gross business given to ABN AMRO Asia Equities (India) Limited,Associate Broker, from inception to February 24, 2006, was Rs. 20,303.41lakhs and the percentage of brokerage commission paid to them as comparedto the total business was 2.17% . For details of amount of brokerage paid toABN AMRO Asia Equities (India) Limited please refer the table below.

The amount paid to the Sponsor, its associates or the Asset Management Company, Trustee Company, for transactions and services performed by them,from inception to February 24, 2006, is given below:

Name of the Nature of Amount paid by the Schemesassociate Transaction (Rs. in Lakhs)

AAEF AACF AAFDF AAFRF AAMIP AAOF AALTFRF AADYF AATAP AAFTP-1

ABN AMRO Asia Brokerage on securities 37.00 – – – 0.57 14.07 – 8.68 6.59 –Equities (India) Limited transactions

ABN AMRO Asset Investment 357.19 206.77 70.70 130.54 61.76 249.53 9.89 154.16 18.22 1.15Management (India) Management FeesLimited

ABN AMRO Trustee Trustee Fees 1.8 5.40 0.65 3.09 0.18 0.43 – 0.87 – –(India) Private Limited

ABN AMRO Bank N.V. Commission & 1031.52 28.19 35.41 79.70 38.23 952.46 0.26 751.51 263.54 –distributions expenses

Bank charges 2.14 4.06 0.54 2.53 0.19 3.31 0.11 2.67 1.31 –

The above associate transactions are as per SEBI Regulations and the limits, if any, prescribed thereunder.

BORROWING BY THE MUTUAL FUND

Under the SEBI Regulations, the Mutual Fund is allowed to borrow to meetthe temporary liquidity requirements of its Scheme for the purpose ofrepurchase or redemption of Units or the payment of interest or dividend tothe Unitholders. Further, as per the SEBI Regulations, the Mutual Fund shallnot borrow more than 20% of the Net Assets of the Scheme and the durationof such borrowing shall not exceed a period of six months.

The Mutual Fund may, subject to the approval of the Trustee, raise suchborrowings from the Sponsor or its group companies, subsidiaries,associates, affiliates, etc., or Banks in India or any other entity at marketrelated rates prevailing at the time and applicable to similar borrowings. Thesecurity for such borrowings, if required, will be as determined by the Trustee.Such borrowings, if raised, may result in a cost, which would be dealt within consultation with the Trustee.

SECURITIES LENDING BY THE MUTUAL FUND

Subject to the SEBI Regulations as applicable from time to time, the Schememay, subject to the approval of the Trustee, engage in Securities Lending.Securities Lending means the lending of Securities to another person orentity for a fixed period of time, at a negotiated compensation in order toenhance returns of the portfolio. The securities lent will be returned by theborrower on the expiry of the stipulated period.

The risks in lending portfolio securities, as with other extensions of credit,consist of the failure of another party, in this case the approved intermediary,to comply with the terms of agreement entered into between the lender ofsecurities i.e. the Scheme and the approved intermediary. Such failure tocomply can result in the possible loss of rights in the collateral put up by theborrower of the securities, the inability of the approved intermediary to returnthe securities deposited by the lender and the possible loss of any corporate

benefits accruing to the lender from the securities deposited with theapproved intermediary. The Scheme may not be able to sell such lentsecurities and this can lead to temporary illiquidity.

The Scheme, under normal circumstances, shall not have exposure of morethan 25% of the net assets of the Scheme in Securities Lending. The Schemewill also not lend more than 5% of its net assets to any one intermediary towhom securities will be lent. The AMC shall report to the Trustee on aquarterly basis as to the level of lending in terms of value, volume and thenames of the intermediaries and the earnings / losses arising out of thetransactions, the value of collateral security offered etc.

UNDERWRITING BY THE MUTUAL FUND

Subject to the SEBI Regulations, the Scheme may enter into underwritingagreements after the Mutual Fund obtains necessary registration in termsof the Securities and Exchange Board of India (Underwriters) Rules andSecurities and Exchange Board of India (Underwriters) Regulations, 1993authorising it to carry on activities as underwriters. The capital adequacynorms for the purpose of underwriting shall be the net assets of the Schemeand the underwriting obligation of the Scheme shall not at any time exceedthe total net asset value of the Scheme. For the purpose of the SEBIRegulations, the underwriting obligation will be deemed as if investmentsare made in such securities.

INTER-SCHEME TRANSFERS

Transfer of investments from one scheme to another scheme under theMutual Fund, shall be allowed only if:

(a) such transfers are made at the prevailing market price for quotedSecurities on spot basis.

(b) the Securities so transferred shall be in conformity with the investmentobjective of the scheme to which such transfer has been made.

DISCLOSURE UNDER SEBI REGULATION 25(11)

Investments made by the schemes of ABN AMRO Mutual Fund in Companies or their subsidiaries that have invested more than 5% of the net assets of anyscheme is given below :

Company Name Investment of Company Investment of Aggregate Cost of Market Valuein Schemes Schemes in the Acquisition during the (Rs. in Lakhs)

Company period (Rs. in Lakhs)* as on 24/02/2006

Allahabad Bank AAEF AAEF 82.00 –AAFRF AAMIP 7.38 –

AACF 2,465.58 –AAOF 172.20 711.13AADYF 1,127.95 –

Bharat Aluminium Company Ltd. AACF AACF 4,000.00 –AAFRF

Bharti Tele Ventures Ltd. AACF AAEF 2,688.29 –AAFRF AAMIP 69.74 –

AAOF 734.44 –

Bank of India AACF AAEF 1,230.21 606.31AAFRF AAMIP 22.16 –

AAOF 1,202.44 558.60AATAP 62.32 –

Exim Bank AACF AACF 6,387.18 2,500.00

43


Finolex Industries Ltd. AAMIP AADYF 445.22 398.41

Grasim Industries Ltd. ^ AACF AAEF 2,034.20 –AAOF 636.23 –

Gujarat Ambuja Cements Ltd. AACF AAEF 1,560.63 –AAMIP 57.27 –AAOF 902.05 –AATAP 398.39 –

HCL Technologies Ltd. AALTRF AAEF 1,995.32 561.09AAOF 1,390.52 718.60

AADYF 2,032.67 1,150.87

HDFC Bank Ltd. AACF AACF 17,086.94 7,091.34AAFRF AAFRF 1,977.63 –AALTRF AATAP 494.41 –

AATAP 494.40 –

Hero Honda Motors Ltd. AALTRF AAEF 540.47 –AAFRF AAMIP 13.55 –

AADYF 3,029.58 –

ICICI Bank Ltd. AAFRF AAEF 2,569.58 –AAMIP 45.10 –AACF 26,173.99 –AAFRF 5,037.43 3,506.11AAOF 1,883.36 –AATAP 649.41 –

AAFTP1 2,327.63 2,327.63

ICICI Securities Ltd. AACF AACF 23,000.00 –AAFRF AAFRF 7,000.00 –

IDBI ^ AACF AAFDF 251.00 –AAMIP 251.00 –AACF 22,424.30 2,856.87AAFRF 3,872.51 1,479.76

IDFC AACF AAEF 122.14 –AAFRF AAFDF 2,445.87 –AALTRF AAMIP 38.67 –

AACF 8,654.14 –AAFRF 496.34 –AAOF 164.55 –

Infosys Technologies Ltd. AACF AAEF 3,976.31 841.47AAMIP 47.48 –AAOF 2,275.85 739.07AATAP 397.41 –

ITC Ltd. AAFRF AAEF 3,374.07 742.29AACF AAMIP 75.14 54.77

AAOF 1,574.35 –AATAP 378.22 –

Larsen & Toubro Ltd. AAEF AAEF 2,957.83 343.97AAOF AAMIP 29.42 –

AACF 2,500.00 –AAOF 1,304.44 263.11AATAP 271.15 210.95

Reliance Industries Ltd. AACF AAEF 4,750.24 770.16AAFRF AAMIP 101.35 –AAFDF AACF 1,036.97 –

AAOF 2,945.71 792.27AAFRF – –AAFDF 1,000.00 –

Sterlite Industries Ltd. AACF AAEF 1,330.23 –AAFRF AAMIP 14.81 –AALTRF AACF 13,100.00 –

AAFRF 9,000.00 –

Syndicate Bank AAFRF AAEF 621.86 585.19AAMIP 47.34 46.27AAOF 906.44 709.95

AADYF 614.24 546.60AATAP 491.10 –

Union Bank of India AACF AAEF 865.40 –

UTI Bank Ltd. AACF AACF 20,259.74 4,942.37AAFRF AAFRF 6,449.08 628.83

AAMIP – –AALTRF 1,000.00 –AAFDF 2,500.00 2,500.00AAOF – 145.04

Wipro Ltd. AACF AAEF 820.02 657.76AAOF 677.43 609.73

The above investments were made as per the investment objectives of the respective Scheme(s).* Does not include the Interscheme Transfer^ Includes the investment made in subsidiary company.

Company Name Investment of Company Investment of Aggregate Cost of Market Valuein Schemes Schemes in the Acquisition during the (Rs. in Lakhs)

Company period (Rs. in Lakhs)* as on 24/02/2006

ELECTRONIC CLEARING SERVICE (ECS)

ECS is a facility offered by RBI, for facilitating better customer service bydirect credit of dividend to an investor’s bank account through electroniccredit. This helps in avoiding loss of dividend warrant in transit or fraudulentencashment. The Mutual Fund will endeavour to arrange such facility forpayment of dividend proceeds to the Unitholders. However, this facility isoptional for the investors.

In order to avail the above facility, the investor will have to give a writtenrequest to the ISC. If the Unitholder has opted for the ECS facility his / herbank branch will directly credit the amount due to them in their accountwhenever the payment is through ECS. The ISC will send a separate adviceto the Unitholder informing them of the direct credit.

It may be noted that there is no commitment from the Mutual Fund thatthis facility will be made available to the Unitholders for payment of dividendproceeds. While the Mutual Fund will endeavour in arranging the facility itwill be dependent on various factors including sufficient demand for thefacility from Unitholders at any centre, as required by the authorities. Inplaces where such a facility is not available or if the facility is discontinuedby the Scheme for any reason, the AMC shall despatch to the Unitholdersthe dividend warrants within 30 days of the declaration of the dividend.

POWERS TO REMOVE DIFFICULTIES

If any difficulty arises in giving effect to the provisions of the Scheme, theTrustee / AMC may, subject to the SEBI Regulations, take such steps thatare not inconsistent with these provisions, which appears to them to benecessary, desirable or expedient, for the purpose of removing difficulties.

POWERS TO MAKE RULES

Subject to the SEBI Regulations, the Trustee / AMC may from time to time,prescribe such terms and make such rules for the purpose of giving effectto the provisions of the Scheme, and add to, alter or amend all or any of theterms and rules that may be framed from time to time.

PENALTIES, PENDING LITIGATION OR PROCEEDINGS,FINDINGS OF INSPECTIONS OR INVESTIGATION FOR WHICHACTION MAY HAVE BEEN TAKEN OR IS IN THE PROCESS OFBEING TAKEN BY ANY REGULATORY AUTHORITY

All cases of penalties awarded by SEBI under the SEBI Act or any of itsregulations against the Sponsor of the Mutual Fund or any companyassociated with the Sponsor in any capacity including the Asset ManagementCompany, Trustee Company / Board of Trustees, or any of the Directors orkey personnel (specially the Fund Manager(s)) of the Asset ManagementCompany and Trustee Company. The nature of the penalties must bedisclosed.

Nil

For Sponsors and its associates, other than the penalties above, penaltiesawarded by any financial regulatory body, including stock exchanges, fordefaults in respect of shareholders, debenture holders and depositors shallalso be disclosed.

ABN AMRO Bank N. V. (associate of the Sponsor)

The Dutch Central Bank, the US Federal Reserve Board, the US Departmentof the Treasury’s Office of Foreign Assets Control (OFAC) and Office ofFinancial Crime Enforcement Network (FinCEN), the State of IllinoisDepartment of Financial and Professional Regulation and the New York StateBanking Department imposed a sanction of a cease and desist order,including an aggregate civil penalty of USD 75 mln (approx. EUR 62.5 mln).In addition, ABN AMRO Bank N.V. has agreed to make a voluntaryendowment of USD 5 mln (approx. EUR 4 mln) to the Illinois Bank Examiners’Education Foundation, bringing the total amount related to this sanction toUSD 80 mln (approx. EUR 66.5 mln). Furthermore, the Bank must continueto implement improvements in its oversight and compliance programmes.

ABN AMRO Bank N.V. is sanctioned principally in connection withdeficiencies in the US dollar clearing operations at its New York branch andviolations of the OFAC regulations originating at its branch in Dubai. Theactions that are the subject of the sanctions predominantly took place beforethe 2004 written agreement mentioned above, and many were discoveredby investigations initiated by the bank and voluntarily reported to regulatoryauthorities.

A penalty amounting to Rs. 2,58,382 was levied in 1999 against ABN AMROBank N.V. by Reserve Bank of India for shortfall in maintaining Cash ReserveRatio for the fortnight ended 23 December, 1994.

A penalty amounting to Rs. 19,14,282 was levied in 1999 against ABN AMROBank N.V. by Reserve Bank of India for shortfall in maintaining Cash ReserveRatio for the fortnight ended 12 April, 1996.

Additionally penalties awarded for any economic offence and violation ofany securities laws, against the Sponsor and its associates.

Nil

Any pending material litigation proceedings incidental to the business ofthe Mutual Fund to which the Sponsor of the Mutual Fund or any companyassociated with the Sponsor of the Mutual Fund in any capacity includingthe AMC, Board of Trustees / Trustee Company or any of the Directors orkey personnel is a party.

Nil

Any pending criminal cases against the Sponsor or any company associatedwith the Sponsor in any capacity including the AMC, Board of Trustees /Trustee Company or any of the Directors or key personnel should also bedisclosed separately.

A criminal case has been filed by Enforcement Directorate against ABNAMRO Bank N.V. (associate of the Sponsor) in the Magistrate’s Court atNew Delhi for an “alleged” violation of Foreign Exchange and RegulationAct (FERA). The criminal case is still pending. On the same matter, the Bankhas earlier been exonerated of all charges by the Tribunal.

Any deficiency in the systems and operations of the Sponsor of the MutualFund or any company associated with the sponsor in any capacity such asthe AMC or the Trustee Company which SEBI has specifically advised to bedisclosed in the Offer Document, or which has been notified by any otherregulatory agency shall be disclosed.

Nil

The above information has been disclosed in good faith as per the informationavailable to the AMC.

OMNIBUS CLAUSE

Besides the AMC, the Trustee/Sponsor may also absorb expenditures inaddition to the limits laid down under Regulation 52.

Further, any amendment/clarification and guidelines including in the form ofnotes or circulars issued from time to time by SEBI for the operation andmanagement of Mutual Fund shall be applicable.

DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents may be inspected between 9.30 a.m. to3.00 p.m. on any Business Day at the registered office of the AMC.

1. Trust Deed;

2. Investment Management Agreement;

3. Agreement with the Custodian;

4. Agreement with the Registrars and Transfer Agents;

5. Memorandum and Articles of Association of the Trustee and AMC;

6. Securities and Exchange Board of India (Mutual Funds) Regulations,1996;

7. Indian Trusts Act, 1882;

8. Consent of the Auditors to act in the said capacity;

9. Registration Certificate for the Mutual Fund granted by SEBI; and

10. Annual Report of the Asset Management Company.

Notes:

1. Further, any amendments / replacement / re-enactment of the SEBIRegulations subsequent to the date of the Offer Document shall prevailover those specified in this Offer Document.

2. The Scheme under this Offer Document was approved by the Trusteeon January 4, 2006.

3. Notwithstanding anything contained in this Offer Document, theprovisions of Securities and Exchange Board of India (Mutual Funds)Regulations, 1996 and the guidelines thereunder shall be applicable.

For and on behalf of the Board of Directors ofABN AMRO Asset Management (India) Ltd.

Abhaya JoglekarHead - Compliance & Risk Management

Place : MumbaiDate : March 3, 2006

44




LIST OF COLLECTION CENTRES (During New Fund Offer Period)

ABN AMRO BANK N.V - Collection Centres : BANGALORE : Prestige Towers, 99 & 100, Residency Road, Bangalore - 560 025 & CHENNAI : 19/1, Haddows Road, Chennai - 600 006 & HYDERABAD : 6-3-248/1/1A, RoadNo.1, Banjara Hills, Hyderabad - 500 034 & KOLKATA : Azimganj House, Unit No. 3, 4, & 5, 7 Camac Street, Kolkata - 700 017 & LUCKNOW : 31/93, M.G. Marg, Lucknow - 226 001 & MANGALORE : Maximus Commercial Complex,Light House Hill Road, Mangalore - 575 001 & MORADABAD : GF-1, Parsvnath Plaza - II, Neelgiri Commercial Complex, Delhi Road, Moradabad & MUMBAI : Brady House, 14, Veer Nariman Road, Fort, Mumbai - 400 023 & NEW DELHI :Hansalaya Building, 15, Barakhamba Road, New Delhi 110 001 & PANIPAT : Showroom No. 1196/7 (Part), Opp. N.K. Towers, Near I. B. College, G.T. Road, Panipat - 132 103 & PUNE : Radiant Plaza, 327, M.G. Road, Pune Camp, Pune411 001 & SURAT : K.G. House, Upper Ground Floor, Ghod Dhod Road, Off Parle Point, Surat - 395 007 & TIRUPUR : Global Trade Centre, 1st Floor, 48, Kangeyam Road, Tirupur - 641 604 & VADODARA : 7, Alkapuri, R.C. Dutt Road,Vadodara - 390 007.

HDFC BANK LTD. - Collection Centres : AGRA : Shop No-11, Block No. 17/2/4, Friends Plaza, Sanjay Place, Agra - 282 002 & AHMEDABAD : 5th Floor, 501/502 Business Broadway Centre, Opp. Samtheswar Mahadev, LawGarden, Ellisbridge, Ahmedabad - 380 006 & AHMEDNAGAR : Amber Plaza, Station Road, Opp. ADCC Bank Sahakar Gruh., Ahmednagar - 414 001 & ALWAR : Bhagat Singh Circle, Road No. 2, Alwar, Alwar - 301 001 & AJMER : AMCNo.13/10 & 14/10, Near Suchma Kendra, Adjacent to Swami Complex, Ajmer - 305 001 & AKOLA : Sethi Heights, Opp to Collector Office, Z P Road, Akola - 444 001 & AMBALA : Shingar Palace Complex, Nicholson Road, AmbalaCantt. 133 001 & AMRAVATI : C/o Rasik Plaza, Jaistambh Chowk, Morshi Road, Amravati - 444 601 & AMRITSAR : 39, The Mall, Amritsar & ANAND : 1st Floor, Sanket Towers, Opp. Anand Arts College, Grid Road, Anand - 388001 & ANKLESHWAR : SA Motors Bulding, Old National H No - 8, Ankleshwar - 395 002 & ASANSOL : P. C. Chatterjee Market, G. T. Road, Rambandhu Tala, Asansol - 713 303 & AURANGABAD : Shivani Chambers, Manjeet Nagar,Jalna Road, Opp. Akashwani, Auranagabad - 431 001 & BANGALORE : No. 8/24, Salco Centre, Richmond Road, Bangalore - 560 025 & BARDOLI : Shree Ambika Niketan Temple, Bardoli Dist Surat - 394 601 & BAREILLY : 154, KrishnaPalace, Civil Lines, Bareilly - 243 001 & BARODA : 5th Floor,'Midway Heights', Next to Panchmukhi Hanuman Temple, Lokmanya Tilak Rd, Kirti Mandir, Near Kala Ghoda, Raopura, Baroda - 390 001 & BELGAUM : 4830/28A Opp DistHospital, Dr Ambedkar Road, Belgaum - 590 002 & BHARUCH : Near Octroi Naka, Link Rd, Bharuch - 392 001 & BHATINDA : 3027-B, Guru Kanshi Marg, Bathinda - 151 001 & BHAVNAGAR : Gopi Arcade, Opp. Takhteshwar PostOffice, Bhavnagar & BHIWADI : SP 54 Ashiana Arcade, Riico Industrial Area, Bhiwadi - 301 019. & BHOPAL : E-1/57, Arera Colony, Bhopal - 462 016 & BHUBANESHWAR : Junction of Janpath & Gandhi Marg, Hotel Jajati Complex,Kharvelanagar, Unit - III, Master Canteen Square, Bhubaneswar - 751 001 & BHUJ : 101 & 102 Sunrise Tower, 11 - Vijaynagar Society, Hospital Road, Bhuj - 370 001. & BOKARO : B-9 City Centre , Sector IV, Bokaro Steel City , Bokaro- 827 004 & BURDWAN : 45 G .T. Road, Birhata, Burdwan - 713 001 & CALICUT : Malabar Palace, G. H. Road, Calicut - 673 001 & CHALAKUDY : Irimpan's Shopping Complex, Police Station Road, Chalakudy - 680 307 & CHANGANACHERRY :Golden Tower, M. C. Road, Vezhakattuchira, Changanacherry - 686 101 & CHANDIGARH : 189 / 190 /191, Sector 17-C , 4th Flooor, Chandigarh - 160 017 & CHANDIGARH : SCO 371/372, Sector 35-B, Chandigarh & CHENGANNUR :Bin Tower, Govt. Hospital Junction, Chengannur - 689 121 & CHENNAI : 751 - B Anna Salai, Mariam Centre, Chennai - 600 002 & CUTTACK : Bajrakbati Road, Cuttack. Orissa - 753 001 & COIMBATORE : 1635, Classic Towers, TrichyRoad, Coimbatore - 641 018 & DAHANU : Matruashish Building , Irani Road, Dahanu Road & DAMAN : ARC Shoping Mall, Dilip Nagar, Teen Batti, Daman - 396 210 & DAVANAGERE : No. 621, BHM Enclave, Binny Co. Road, Mandipet,Davangere & DELHI : Fig-ops 1st Floor, Kailash Bldg 26, K. G. Marg, New Delhi - 110 001 & DEHRADUN : 56, Rajpur Road, Dehradun - 248 001 & DHANBAD : Sri Ram Plaza, 1st Floor, Bank More Dhanbad, Jharkhand - 826 001 & DURGAPUR :A102 & 103, City Centre, Bengal Shristi Complex, Durgapur - 713 216 & ERODE : 456 Brough Road, Erode - 638 001 & FEROZEPUR : Bldg # 307/7, The Mall, Ferozepur City, Ferozepur - 152 002 & GANDHIDHAM : Tagore Road, Gandhidham- 370 201 & GORAKHPUR : Prahlad Rai Trade Centre, Ayodhya Crossing, Bank Road, Gorakhpur - 273 001 & GUNTUR : 87-90, Main Road, Lakshmipuram, Guntur - 522 007 & GURDASPUR : SCF-1& 2 Shopping Complex, ImprovementTrust Market, Hanuman Chowk, Gurdaspur - 143 521 & GUWAHATI : Guwahati Branch, House No. 126, Opp. Times of India, Bhangagarh, Guwahati - 781 005 & GWALIOR : Anand Deep Building, City Centre, Gwalior & HISSAR : SCO170, Red Square Market, Station Road, Hissar - 125 001 & HOSHIARPUR : SCO 1-2-3, Improvement Trust, Hoshiarpur - 146 001 & HOSUR : No. 24 & 25, Maruthi Nagar, Near Dharga, Sipcot PO, Hosur - 635 126 & HUBLI : T B RevankarComplex, Vivekanand Hospital Road, Hubli - 580 029 & HYDERABAD : 6-1-73 3rd Floor, Saeed Plaza, Lakdikapul, Hyderabad - 500 004 & INDORE : IIIrd Floor, 9/1A , U. V. House, South Tukonj, Indore - 452 001 & IRINJALAKUDA :Ushus Complex, Main Road, Tana, Irinjalakuda - 680121 & JABALPUR : 1702, Napier Town Model Road, Jabalpur - 482 002 & JAIPUR : HDFC Bank House, 1st Floor, O-10, Ashok Marg, Ahimsa Circle, C-Scheme, Jaipur & JAGRAON :368 B, Kapoor Building, Tehsil Road, Jagraon - 142 026 & JALANDHAR : 911, G.T. Road, Near Narinder Cinema, Jalandhar & JALGAON : Facing Mahabal Rd., DSP Chowk, Jalgaon - 425 001 & JAMNAGAR : Plot No. 6, Park Colony,Opp. St Ann's School, Bedi Bunder Road, Jamnagar - 361 008 & JAMSHEDPUR : C/o Mithila Motors Ltd., Near Rammandir, Bistupur, Jamshedpur - 831 001 & JAMMU : CB 13, Railhead Complex, Gandhi Nagar, Jammu & JODHPUR :57/B "Swapndeep", Chopasani Road, Jodhpur - 342 003 & JUNAGADH : Moti Palace.Ground Floor, Moti Baug Road, Junagadh - 362 001 & KADI : Near N. C. Desai Petrol Pump, Radhaswami Complex, Highway Char Rasta, Kadi -382 715 & KANPUR : Navin Market Branch, 15/46, Civil Lines, Kanpur – 208 001 & KANNUR : K V R Towers, South Bazar Road, Kannur - 670 002 & KAPURTHALA : Mall Road, Kapurthala & KARNAL : SCO 778-779, Opp MahabirDal Hospital, Kunjpura Road Karnal & KHANNA : G. T. Road, Khanna - 141 401 & KOCHI : 2nd Floor, Elmar Square, M. G. Road, Ravipuram, Kochi - 682 016 & KOLKATA : Abhilasha II ,6, Kolkata & KOLHAPUR : Jaju Arcade, TarabaiPark, Kolhapur - 416 003 & KOLLAM : VGP Buildings, Door No. XVI / 1539 (1320a), Vadakumbhagom Ward, Irumpupalam, Kollam - 691 001 & KOTA : Show Room No-13-14, Main Jhalawar Road, Kota & KOTTAYAM : Unity Building,Opp. MDC Centre, K. K. Road, Kottayam - 686 002 & KARAD : Hotel Sangam, Pune-Banglore Hihgway, Karad, Dist :-Satara - 415 110 & KURUKSHETRA : Shop #1 To 5, Kalawati Market, Railway Road, Kurukshetra - 136 118 & LATUR :Shri Prabha Arcade, Shop Nos. 3 to 6 CTS 705, 31/1 M. G. Road, Near Nagar Parishad, Latur - 413 512. & LUCKNOW : Pranay Tower, Darbari Lal Sharma Marg, Beside Pratibha Cinema, Lucknow - 226 001 & LUDHIANA : 5th Floor,The Mall, Mall Road, Ludhiana & MARGAO : Ranghavi Bldg, Opp. Municipality Garden, Dr. George Baretto Road, Margao - Goa 403 601 & MADURAI : 7-A, West Veli Street, Opp. Railway Station, Madurai - 625 001 & MANJERI : KurikalPlaza, Bldg #20/1245 Kacheripady, Malapurram Road, Manjeri - 676 121 & MANGALORE : M. N. Towers, Kadri, Mangalore - 575 002 & MAPUSA : S1/2 Ground Floor, Cosmos Towers, Near Govt. Bldg. Complex, Mapusa Goa 403 507& MATHURA : Opp BSA College, Gaushala Road, Mathura - 281 001 & MEERUT : 381 Western Kachery Road, Meerut - 250 001 & MEHSANA : Prabhu Complex, Nr. Raj Kamal Petrol Pump, Abu Highway, Mehsana. - 384 002 & MOGA :G. T. Road , Opp. D. C. Office, Moga & MORADABAD : Chaddha Shopping Complex, GMD Road, Moradabad, Uttar Pradesh - 244 001 & MORVI : Om Shopping Centre, Ravapar Road, Morvi & MUMBAI : Maneckjiwadia Bldg., NanikMotwani Marg, Mumbai - 400 023 & MUZZAFARPUR : Tilak Maidan Raod, Above Maruti Showroom, Choti Saria Ganj, Muzzafarpur - 842 001 & MYSORE : Nageetha Complex, Vishwamanawa Double road, Saraswathi Puram, Mysore- 570 009 & NADIAD : Shoot Out Bldg, Nadiad Ice Factory Compound, College Rd, Nadiad - 387 001 & NAGPUR : 303 & 304 3rd Floor, Wardh Road, Transactional Banking Group, 12, Milestone, Near Lokmat Square, Nagpur - 440 010 & NASIK :Archit Centre, 3rd Floor, Chandak Circle Link Road, Opposite Sandeep Hotel, Near Mahamarg Bus Stand, Nasik - 422 002 & NAVSARI : Nandini Complex, Ground Floor, Station Road, Sandh Kuva, Navsari - 396 445 & NAWANSHAHAR :B1/48, Banga Road, Nawanshahar - 144 514 & NELLORE : 17/126, G.V.R. Enclave, G. T. Road, Nellore - 524 001 & PALAKKAD : 8/246, Chandra Nagar, Palakkad - 678 007 & PANIPAT : 801/4, G. T. Road, Panipat - 132 103 & PALANPUR :Parth Complex,Near Cozy Tower, Opp. Joravar Palace, Palanpur - 385 001 & PANJIM : Swami Vivekanand Road, 301 , Milroc Lar Menezes, Opp. Gomantak Maratha Samaz, Panjim-Goa 403 001 & PATHANAMTHITTA : Aban ArcadeWard # 9/1128, Pathanathitta-kumbazha Road, Pathanathitta - 689 645 & PATIALA : S.C.O. 70-73, Leela Bhawan Market, Patiala - 147 001 & PATNA : Rajendra Ram Plaza, Exhibition Road, Patna - 800 001 & PHAGWARA : Opp. BusStand, G.T. Road, Phagwara & PERINTHALMANNA : Sree Complex, Calicut Road, Perinthalmanna, Malappuram Dist, Perinthalmanna - 679 322 & PONDA : Royal Chambers, GD1-GD4, , Tisk, Ponda - Goa 403 401 & PONDICHERRY :TS No 6, 100 Feet Road, Ellaipillaichavady, Pondicherry - 605 005 & PORBANDAR : Om Shiv Shakti, R.D. Chembers, Porbandar - 360 575 & PUNE : 5th Floor, Millennium Tower , Bhandarkar road , Shivajinagar, Pune - 411 004 & RAIPUR :Chawla Complex, Near Vanijya Bhawan, Sai Nagar, Devendra Nagar Road, Raipur - 492 009 & RAJAHMUNDRY : H. No. 46-17-20, Main Road, Danavaipet, Rajahmundry - 533 103 & RAJKOT : Opp Alfred High School, 2nd Floor, PanchratnaBuilding, Jawahar Road, Rajkot & RANCHI : Ranchi Club Shopping Complex, Apt. No .11, Main Road, Ranchi - 834 001 & REWARI : L-203. Old Court Road, Model Town, Rewari - 123 401 & ROHATAK : 401-402, Model Town, D-Park,Delhi Road & ROPAR : College Road, Ropar & ROURKELA : Bisra Road, Dwivedi Bhawan, Dwivedi Square, Rourkela - 769 001 & RUDRAPUR : Plot No.1 & 2, Nanital Road, Rudrapur - 263 153 & SAHARANPUR : Mission Compound,Court Road, Adj. Top Shop, Saharanpur - 247 001 & SALEM : 5/241-F, Rathna Arcade, Omalur Main Road, Salem - 636 004 & SANGLI : 640, Venkatesh Senate, Sangli - Miraj Rd., Sangli - 416 416 & SANGRUR : Shop No. 1-2-3 KaulaPark Market, Sangrur & SHIMLA : Jankidas Building, 3, The Mall, Shimla - 171 001. & SILIGURI : 3 No. Ramkrishna Samity Building, Sevoke Road, Pani Tanki More, Siliguri - 734 401 & SILVASSA : 1-16, Jaypee House, Opp. Patel PetrolPump, Vapi-Silvassa Road, Silvassa - 396 230 & SOLAN : Anand Bhavan, Near D.C. Office, Rajgarh Road, Solan - 173 212 & SURAT : 7th Floor, Kashi Plaza, Next to Dr. Bipin Desai Children Hospital, Majura Gate, Surat - 395 002 & THALASSERY :Sahara Centre, AVK Nair Road, Thalassery - 670 101 & THIRUVALLA : Illampallil Buildings, 26/149(1&2), M.C. Road, Tiruvalla - 689 101 & TIRUPATI : H.No.10-14-575/A3, Mosque Road (V.V. Mahal Road), Tirupati - 517 501 & TRICHUR :

Kalliyath Royal Square, Palace Road,Trichur - 680 020 & TRICHY : A-10, " Lakshmi Arcade", 11Th Cross Main Road, Thillainagar, Trichy - 620 018 & TRIVANDRUM : Kenton Towers, Vazhuthacaud, Trivandrum - 695 014 & UDAIPUR :Chetak Circle, GPO Road, Udaipur & UDUPI : No.13-3-20 B 1 Panduranga Towers, Diana Circle Court Road, Udupi - 576 101 & VALSAD : Ekta Appt., Nr, RJJ High School, Thithal Road, Valsad - 1. & VAPI : Lower Ground, Emperor Arcade,Chala Road, Vapi - 396 191 & VARANASI : D 58/2 Kuber complex, Rathyatra Crossing, Varanasi - 221 010 & VASCO : Gr. Floor, Damodar Building, Swatantra Path, Vasco Da Gama, Goa - 403 802 & VIJAYAWADA : 40-1-48/2, M.G. Road,Labbipet, Vijayawada - 520 010 & VISAKHAPATNAM : Potluri Castle, Dwaraka Nagar, Visakhapatnam & WARANGAL : D.No. 1-8-605/1 Nakkalgutta ,Hanamkonda, Warangal - 506 002 & YAMUNANAGAR : 103, Model Town, NehruPark Road, Yamunanagar - 135 003

STANDARD CHARTERED BANK - Collection Centres : AHMEDABAD : Abhijeet II, Ground Floor, Meetakali, 6th Road, Ahmedabad - 380 006 & BANGALORE : 26th Floor, West Wing Raheja Tower, M .G. Road, Bangalore- 560 001 & BARODA : Gokulesh, R. C. Dutt Road, Vadodara - 390 009 & BHOPAL : Ground Floor, Northern Wing, Alankar Complex, Plot No.10, Zone II, M.P. Nagar, Bhopal - 462 011. & BHUBANESHWAR : Plot No. 3, Bapuji Nagar,Janpath, Bhubaneshwar - 751 009 & CHANDIGARH : SCO, 137-138 Sector - 9C, Madhya Marg, Chandigarh. & CHENNAI : 19, Rajaji Salai Chennai - 600 001 & COIMBATORE : 509, D. B. Road, R. S. Puram, Coimbatore -641 002. & GUWAHATI : G. N. Bardoli Road, Ambari-Guwahati, Guwahati - 781 001 & HYDERABAD : 6-3 1090 Raj Bhavan Road, Somajiguda, Hyderabad - 500 082 & JAIPUR : 8, Showroom No.1, Bhagwat Bhawan, MI Road,Jaipur & JALANDHAR : Plot No. 34, G. T. Road, Jalandhar - 144 001. & INDORE : #21/1DM Towers, Race Course Road, Indore & KANPUR : 16/105, M.G. Marg, Kanpur - 208 001 & KOCHI : XXIV/ 1633, KPK Menon Road WillingdonIsland, Kochi - 682 003 & KOLKATA : 19 Netaji Subhas Road, Kolkata - 700 001 & LUCKNOW : 4 Shahnajaf Road, Lucknow - 226 001 & LUDHIANA : SCO 16-17, Feroze Gandhi Market, Ludhiana - 141 001 & MUMBAI : 270 D.N. Road,Fort, Mumbai - 400 001 & NAGPUR : Narang House, Palm Road, Civil Line, Nagpur - 440 001 & NEW DELHI : H2 Connaught Circle New Delhi-110 001 & PATNA : Bhagwati Dwaraka Arcade, Plot No: 830 P, Exhibition Road, Patna- 800 001 & PUNE : Shrirang House, 364-365 Junglee Maharaj Road, Shivaji Nagar, Pune - 411 005 & RAJKOT : Business Empire, 5 Jagnath Plot, Gymkhana Road, Rajkot - 360 002 & SURAT : Manav Mandir, UG4 & Ff, Parle Point,Surat - 395 007

AMC Investor Service Centres : BANGALORE : 22, 3rd Floor, Prestige Kada, Above Bank of India, Richmond Road, Bangalore - 560 025. & CHENNAI : 19/1, Haddows Road, Chennai - 600 006. & HYDERABAD : 6-3-248/1/1A,Road No.1, Banjara Hills, Hyderabad - 500 034 & KOLKATA : ITC Centre, 4 Russel Street, Kolkata - 700 071. & MUMBAI : 602, 6th Floor, Embassy Centre, Nariman Point, Mumbai - 400 021. & NEW DELHI : 405, 4th Floor, AshokaEstate, 24, Barakhamba Road, New Delhi - 110 001.

APPLICATIONS FOR SWITCH WILL NOT BE ACCEPTED AT THE ABOVE COLLECTION CENTRES.

LIST OF OFFICIAL POINTS OF ACCEPTANCE OF TRANSACTIONS

(Post New Fund Offer Period and for Application for Switch during the New Fund Offer Period)

AMC Investor Service Centres : BANGALORE : 22, 3rd Floor, Prestige Kada, Above Bank of India, Richmond Road, Bangalore - 560 025. & CHENNAI : 19/1, Haddows Road, Chennai - 600 006. & KOLKATA : ITC Centre, 4 RusselStreet, Kolkata - 700 071. & MUMBAI : 101, 10th Floor, Sakhar Bhavan, Nariman Point, Mumbai 400 021; 602, 6th Floor, Embassy Centre, Nariman Point, Mumbai - 400 021. & NEW DELHI : 405, 4th Floor, Ashoka Estate, 24, BarakhambaRoad, New Delhi - 110 001

CAMS Investor Service Centres : AHMEDABAD : 402-406, 4th Floor - Devpath Building, Off C. G. Road, Behind Lal Bungalow, Ellis Bridge, Ahmedabad - 380 006. & BANGALORE : Trade Center, First Floor, 45, Dickenson Road(Next to Manipal Center), Bangalore - 560 042. & BHUBANESWAR : 101/ 7, Janpath, Unit - III, Bhubaneswar - 751 001. & CHANDIGARH : SCO 154-155, 1st Floor, Sector 17-C, Chandigarh - 160 017. & CHENNAI : Ground Floor, No.178/10, Kodambakkam High Road, Opp. Hotel Palmgrove, Nungambakkam, Chennai - 600 034. & COCHIN : 40-9633 D, Veekshanam Road, Near International Hotel, Cochin - 682 035. & COIMBATORE : 66. Lokamanya Street (West), Ground Floor, R.S. Puram, Coimbatore - 641 002. & DURGAPUR : SN - 10, Ambedkar Sarani, City Centre, Durgapur - 713 216. & INDORE : Dalal Chambers, 101, Sagarmatha Apartments, 1st Floor, 18 / 7 M. G. Road, Indore - 452003. & JAIPUR : G-III, Park Saroj, Behind Ashok Nagar Police Station, R-7, Yudhisthir Marg, C - Scheme, Jaipur - 302 001. & KANPUR : G - 27, 28 - Ground Floor, City Centre, 63/ 2, The Mall, Kanpur - 208 001. & KOLKATA : "LORDSBuilding", 7/1, Lord Sinha Road, Ground Floor, Kolkata - 700 071. & LUCKNOW : No.3. First Floor, Saran Chambers 1, 5, Park Road, Lucknow - 226 001. & LUDHIANA : Shop no. 20-21 (Ground Floor), Prince Market, Near Traffic Lights,Sarabha Nagar Pulli, Pakhowal Road, P.O: Model Town, Ludhiana - 141 002. & MADURAI : 86/71A, Tamilsangam Road, Madurai - 625 001. & MANGALORE : No. G 4 & G 5, Inland Monarch, Opp. Karnataka Bank, Kadri Main Road,Kadri, Mangalore - 575 003. & MUMBAI : Rajabahdur Compound, Ground Floor, Behind ICICI Bank, 30, Mumbai Samachar Marg, Fort, Mumbai - 400 023. & NAGPUR : 145 Lendra Park, Behind Shabari, New Ramdaspeth, Nagpur - 440 010.& NEW DELHI : 304-305 III Floor, Kanchenchenga Building, 18, Barakhamba Road, New Delhi - 110 001. & PANAJI : No.108, 1st Floor, Gurudutta Bldg, Above Weekender, M. G. Road, Panaji, Goa - 403 001. & PATNA : KamlalayeShobha Plaza (1st Floor), Behind RBI Near Ashiana Tower, Exhibition Road, Patna - 800 001. & PUNE : Nirmiti Eminence, Off No. 6, I Floor, Opp Abhishek Hotel, Mehandale Garage Road, Erandawane, Pune - 411 004. & SECUNDERABAD :102, First Floor, Jade Arcade, Paradise Circle, Secunderabad - 500 003. & SURAT : Office No. 2, Ahura-Mazda Complex, 1st Floor, Sadak Street, Timalyawad, Nanpura, Surat - 395 001. & VADODARA : 109 - Silver Line, Besides WorldTrade Centre, Sayajigunj, Vadodara - 390 005. & VISAKHAPATNAM : 47/ 9 / 17, 1st Floor, 3rd Lane , Dwaraka Nagar, Visakhapatnam - 530 016. & VIJAYAWADA : 40-1-68, Rao & Ratnam Complex, Near Chennupati Petrol Pump, M.G Road,Labbipet, Vijayawada - 520 010.

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ABN AMRO Asset Management (India) Ltd.



Tel. : 91-22 5656 3838

Web : www.assetmanagement.abnamro.co.in

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